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THE WAR AFTER THE WAR 




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THE WAR 
AFTER THE WAR 



BY, ^ 

ISAAC F. &ARCOSSON 

CO-AUTHOR OF "CHARLES FROHMAN, MANAGER AND MAN" 
AUTHOR OF "THE AUTOBIOGRAPHY OF A CLOWN," ETC. 



NEW YORK: JOHN LANE COMPANY 
LONDON: JOHN LANE, THE BODLEY HEAD 
TORONTO: S. B. GUNDY : : : MCMXVI.I 



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Copyright, 1016, bv The Curtis Publishing Company 
Copyright, 1916, by The Ridgway Company 



Copyright, 191 7, 
By John Lane Company 



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FEB 28 m}" 



Press of 

J. J. Little & Ives Company 

New York, U. S. A. 



» CI. 4.457244 



TO 
LORD NORTHCLIFFE 

IN GRATEFUL APPRECIATION 



FOREWORD 



FOR nearly three years Europe has 
been drenched with blood and rent 
with bitter strife. Millions of men 
have been killed or maimed : billions 
of dollars in property have gone up in smoke 
and ruin — all part of the mighty sacrifice 
laid on the Altar of the Great War. 

This tragic tumult must inevitably sub- 
side. The smoke of battle will clear: the 
scarred fields will mantle again with spring- 
time verdure: the fighting hosts will once 
more find their way to peaceful pursuit. 
Time the Healer will wipe out the wounds 
of war. 

The world already wearies of the Crimson 
Canvas splashed with martial scene. Hero- 
ism has become the most commonplace of 
qualities : it takes a monster thrill to move a 
civilisation sick of destruction. With eager 
eye it looks forward to the era of regenera- 
tion. War ends some time. 

Business never ceases. Under the shock 
of mighty upheaval it has been dislocated 

7 



Foreword 



by the most drastic strain ever put upon the 
economic fabric. But it will march on long 
after Peace will have mercifully sheathed 
the Sword. Therefore the permanent world 
problem is the Business problem. 

This is why I made two trips to Europe: 
why I submit this little book in the hope that 
it may point the way to some realisation of 
the immense responsibilities which will inev- 
itably crowd upon the world and more espe- 
cially upon the United States. 

Peace will be as great a shock as War. 
Hence the need of Preparedness to meet the 
inevitable conflict for Universal Trade. We 
— as a nation — are as unready for this emer- 
gency as we are to meet the clash of actual 
physical combat. Commercial Preparedness 
is as vital to the national well being as the 
Training for Arms. 

Nor will Commerce be the only thing that 
we will have to reckon with. When you 
have heard the guns roar and watched hori- 
zons flame with fury and seen men go to 
their death smiling and unafraid; when the 
pitiless panorama of carnage has passed be- 
fore you in terms of terror and tragedy, you 
realise that there is something human as 



Foreword 9 



well as economic in the relentless Thing 
called War. 

It means that just as there was no com- 
promise with dishonour in the approach to 
the Super-Struggle for which nations are 
pouring out their youth and fortune, so will 
there be no flinching in that coming contest 
for commercial mastery — the bloodless af- 
termath of History's deadliest and costliest 
war. 

We have reached a place in the World 
Trade Sun. Unless we are ready to hold 
it we will slip into the Shadow. 

We must prepare. 

I. F. M. 



CONTENTS 


CHAPTEB 




PAGB 


I. 


The Coming War . . . 


• 15 


II. 


England Awake; .... 


. 40 


III. 


American Business ] 
France 


:n 
• 7i 


IV. 


The New France . . . 


. 98 


V. 


Saving for Victory . . 


. 120 


VI. 


The Price oe Glory . . 


. 164 


VII. 


The Man Lloyd George . 


. 210 


VIII. 


From Pedlar to Premier . 


. 258 



THE WAR AFTER THE WAR 



I — The Coming War 



WHILE the guns roar from the 
North Sea to the Mediter- 
ranean, and the greatest armed 
host that history has ever known 
is still locked in a life-and-death struggle 
on a dozen fronts, another war, more po- 
tent and permanent perhaps than the one 
which now engulfs Europe, lurks beyond the 
distant horizon of peace. 

Its fighting line will be the boundaries of 
all human needs; its dynamic purpose a 
heroic rehabilitation after stupendous loss. 
It will be the far-flung struggle for the rich 
prize of International Trade, waiting at the 
end of the Crimson Lane that sooner or later 
will have a turning. 

Embattled commercial groups will sup- 
plant embroiled nations; boycotts, discrimi- 
nations and exclusions will succeed the 
strategies of line and trench ; the animosities 
fought out to-day with shell and steel will 
have their heritage in ruthless rivalries. 
How shall we fare in this tumult of tariff 
is 



16 The War After the War 

and treaty? Where shall we stand when 
the curtain of fire fades before a task of re- 
generation that will spell economic rebirth 
or disaster for millions ? Will fiscal punish- 
ment be meted out to neutral and foe alike? 
Will reason rule or revenge dictate a costly- 
reprisal in this war after the war? 

These are the questions that rise out of 
the dust and din of the colossal upheaval 
which is rending half of the world. Di- 
rectly or indirectly they touch the whole 
American people, regardless of rank or 
wealth. The tide of war has rolled us far 
upon the shores of world affairs. We have 
prospered in the kinship of the nations. 
Will the ebb of peace leave us high and dry 
amid a mighty isolation? 

I went to England and France to study 
this problem at first hand. I interviewed 
Cabinet Ministers ; I talked with lawmakers, 
soldiers, captains of capital, masters of in- 
dustry, and plain, everyday business men. 
Often the talk was disturbed by shriek of 
shell or bomb of midnight Zeppelin marau- 
der. 

Through all the travail of debt and death 
that rends the allied peoples runs the clear 



The Coming War 17 

current of determination to retrieve the im- 
mense loss. War is waste; some one must 
pay — we among the rest. Already the guns 
are being trained for the inevitable com- 
mercial battle, which, willingly or unwill- 
ingly, will bring us under fire. Let us ex- 
amine the plan of campaign. 

But before going into the concrete de- 
tails that mean so much to our future and 
our fortune, it is important to understand 
some very essential conditions. 

First and foremost is the uncertainty of 
the war itself. All prophecy — at best a dan- 
gerous thing — is purest speculation. No 
one can tell how long the duel will last ; how 
badly the loser will be beaten ; what the terms 
of peace will be. Yet out of these contin- 
gencies will emerge the strong hands that 
will redraw the trade map of the world. 
Whatever the outcome, the countries now 
fighting, especially the Allies, have definitely 
stated the principles that must govern — for 
a long time, at least — the whole realignment 
of commercial relations. Their way shall 
be the universal way. 

In the second place, be you Ally or Teuton 
and regardless of how you may feel about 



18 The War After the War 

the ethics of the Great Struggle, it must be 
remembered that behind the glamour as 
to whether it is waged to conserve human 
liberty, maintain the integrity of "scraps of 
paper" or to safeguard democracy, the 
larger fact remains that it is a war rooted 
in commercial jealousies and fanned by com- 
mercial aggressions. 

Now we come to the really vital point, and 
it is this: When the guns are hushed you 
will find that national and industrial defence 
among the warring countries will be one and 
the same thing. The Allies learned to their 
cost that the economic advance of Germany 
was merely part of her one-time resistless 
military machine. Her trade and her pre- 
paredness went conqueringly hand in hand. 
Henceforth that game will be played by all. 
England, for instance, will manufacture dye- 
stuffs not only for her textile trades, but 
because coal-tar products are essential to 
the making of high explosives. 

Thus, Competition, which was once merely 
part of the natural progress of a country, 
will hereafter be a large part of the struggle 
for national existence. 

There is still another factor: No matter 



The Coming War 19 

who wins, peace must mean prosperity for 
everybody. For the victor it will take the 
form of an attempted stewardship of trade 
and navigation; for the vanquished it will 
be the dedication of a terrible energy to the 
twin restoration of pride and product. 

Now you begin to see why it is up to the 
United States to make ready for whatever 
business fate awaits her beyond the uncer- 
tain frontiers of to-morrow. Nor have we 
been without warning of what may be in 
store for us. Prohibitive tariffs, blacklists 
and boycotts, embargoes on mail and cargo, 
the exclusion from England and France of 
hundreds of our manufactured articles — all 
show which way the international trade 
winds may blow when the belligerents be- 
gin to take toll of their losses. Meantime, 
what are the facts? 

Take the case of England. Thirty years 
ago she was the workshop of the world. 
From the Tyne to the Thames her factories 
hummed with ceaseless industry. Her goods 
went wherever her ships steamed, and that 
meant the globe. Supreme in her insularity 
— at once her defence and her undoing — 
she became infected with the virus of con- 



20 The War After the War 

tent. Her steel was the best steel ; her wares 
,led all the rest. "Take it or leave it!" was 
her selling maxim. When devices came 
along that saved labour and increased pro- 
duction she refused to scrap the old to make 
way for the new. Born, too, was the evil 
of restricted output. Moss began to grow 
on her vaunted industrial structure. Eng- 
land lagged in the trade procession. 

But as she lagged the assimilative German 
streamed in through her hospitable door. 
He served his apprenticeship in British 
mills; took home the secrets and methods 
of British art and craft. He geared them 
to cheap labour, harnessed product to mas- 
terful distribution, and became a World 
Power. Before long he had annexed the dye 
trade; was competing with British steel; 
was making once-cherished British goods. 

What the German did in England he du- 
plicated elsewhere. The world of ideas was 
his field and, with insatiate hunger, he gar- 
nered them in. He cunningly acquired the 
sources of raw supply, especially the essen- 
tials to national defence; for he overlooked 
nothing. All was grist to his mills. He 
pitched his tents upon debatable trade lands. 



The Coming War 21 

His rivals called it economic penetration, 
because he invariably took root. For him 
it was merely good business. 

Then* England suddenly realised that Ger- 
many had left her behind in the race for 
international commerce. Indifference lay 
at the root of this backsliding. It was easier 
and cheaper to buy the German-made prod- 
uct and reship it than to produce the same 
article at home. Sloth hung like a chain 
on English energy. What did it matter? 
No forest of bayonets hemmed her in; she 
was still Mistress of the Seas. 

Meantime Germany dripped with effi- 
ciency and ached with expansion. Her 
amazing teamwork between state and busi- 
ness, stimulated by an interested finance, 
drove her on to a place in the sun. The 
shadows seemed far away when the great 
war crashed into civilisation. Then England 
woke to the folly of her blindness. The mys- 
tery of coal-tar products was shut up in a 
German laboratory ; the secrets of tungsten, 
necessary to the toughest steel, were im- 
prisoned in a Teutonic mill ; and so on down 
a long list of products vital to industry and 
defence. 



22 The War After the War 

Even those early and tragic reverses of 
the war did not stir the stolid British bulk. 
Men fought for a chance to fight; restric- 
tion still oppressed factory output. Red tape 
vied with tradition to block the path of mili- 
tary and industrial preparation. 

Then the Lion stirred ; the sloth fell away ; 
men and munitions were enlisted ; the strong 
hand was put on labour tyranny; conscrip- 
tion succeeded the haphazard voluntary sys- 
tem. Britain got busy and she has buzzed 
ever since. 

When the kingdom had become a huge 
arsenal; when the old sex differences van- 
ished under the touchstone of a common 
peril; when the first khaki host swept to its 
place in the battle line, and the grey fleets 
were once more queens of the seas, England 
turned to the task of commercial rebuilding, 
once neglected, but thenceforth to be part 
and parcel of British purpose. 

Animating this purpose, stirring it like a 
vast emotion, was the New Battle Cry of 
Empire — the kindling Creed of United Do- 
minions, consecrated to the economic mas- 
tery of the world. 

But this revival was not an overnight per- 



The Coming War 23 

formance. If you know England you also 
know that it takes a colossal jolt to stir the 
British mind. The war had been in full 
swing for over a year and the countryside 
was an armed camp before the realisation of 
what might happen commercially after the 
war soaked into the average islander's con- 
sciousness. 

Under the impassioned eloquence of Lloyd 
George the munition workers had been mar- 
shalled into an inspired working host; 
with the magic of Kitchener's name, the 
greatest of all voluntary armies came into 
being. But it remained for Hughes, of Aus- 
tralia, to point out the fresh path for the 
feet of the race. 

Who is Hughes, of Australia ? You need 
not ask in England, for the story of his ad- 
vent, the record of his astounding triumph, 
the thrilling message that he left implanted 
in the British breast, constitute one of the 
miracles of a war that is one long succes- 
sion of dramatic episodes. This Colonial 
Prime Minister arrived unknown: he left a 
popular hero. 

Thanks to him, Australia was prepared 
for war ; and when the Mother Lioness sent 



24 The War After the War 

out the world call to her cubs beyond the 
seas there was swift response from the men 
of bush and range. The world knows what 
the Anzacs did in the Dardanelles ; how they 
registered a monster heroism on the rocky 
heights of Gallipoli; gave a new glory to 
British arms. 

England rang with their achievements. 
What could she do to pay tribute to their 
courage ? Hughes was their national leader 
and spokesman ; so the Political Powers That 
Be said: 

"Let us invite the Premier to sit in the 
councils of the empire and advise us about 
our future trade policy/' 

Already Hughes had declared trade war 
on Germany in Australia. Under his leader- 
ship every German had been banished from 
commonwealth business; by a special act of 
Parliament the complete and well-nigh war- 
proof Teutonic control of the famous Broken 
Hill metal fields had been annulled. He 
stood, therefore, as a living defiance to the 
renewal of all commercial relations with the 
Central Powers. But he went further than 
this : He decreed trade extermination of the 
enemy — merciless war beyond the war. 



The Coming War 25 

With his first speech in England Hughes 
created a sensation. Before he came com- 
mercial feeling against Germany ran high. 
Hughes crystallised it into a definite cry. 
He said what eight out of every ten men in 
the street were thinking. His voice became 
the Voice of Empire. Up and down England 
and before cheering crowds he preached the 
doctrine of trade war to the death on Ger- 
many. He denounced the laxness that had 
permitted the "German taint to run like a 
cancer through the fair body of English 
trade"; he urged complete economic inde- 
pendence of the Dominions. His persistent 
plea was, "We must have the fruits of vic- 
tory"; and those fruits, he declared, com- 
prised all the trade that Germany had 
hitherto enjoyed, and as much more as could 
be lawfully gained. 

He urged that the blood brotherhood of 
empire, quickened by that dramatic S.O.S. 
call for men across the sea and cemented 
by the common trench hazard, be followed 
by a union of empire after the war that 
should be self-sufficient. Behind all this 
eloquent talk of protection and prohibition 
lay the first real menace to America's new 



26 The War After the War 

place as a world trade power. It was the 
opening call to arms for the war after the 
war. 

Hughes did more than set England to 
thinking in imperial terms. He upset most 
of the calculations of the Powers That Be 
who invited him. They expected an amiable, 
able and plastic counsellor ; they got an ora- 
torical live wire, who would not be ruled, 
and who shocked deep-rooted free-trade con- 
victions to the core. He helped to launch 
a whole new era of thought and action; and 
the next chapter of its progress was now to 
be recorded under circumstances pregnant 
with meaning for the whole universe of 
trade. 

The second winter of war had passed, and 
with it much of the dark night that en- 
shrouded the Allies' arms. On land and sea 
rained the first blows of the great assaults 
that were to make a summer of content for 
the Entente cause. Its arsenals teemed with 
shells ; its men were fit ; victory, however dis- 
tant, seemed at last assured. The time had 
come to prepare a new kind of drive — the 
combined attack upon enemy trade and any 
other that happened to be in the way. 



The Coming War 27 

Thus it came about that on a brilliant sun- 
lit day last June twoscore men sat round a 
long table in a stately room of a palace that 
overlooked the Seine, in Paris. Eminent 
lawmakers — Hughes, of Australia, among 
them — were there aplenty ; but few practical 
business men. 

On the walls hung the trade maps of the 
world; spread before them were the red- 
dotted diagrams that showed the water high- 
ways where traffic flowed in happier and 
serener days. For coming generations of 
business everywhere it was a fateful meet- 
ing because the now famous Economic Con- 
ference of the Allies was about to reshape 
those maps and change the channels of com- 
merce. 

All the while, and less than a hundred 
miles away, Verdun seethed with death ; still 
nearer brewed the storm of the Somme. 

These men were assembled to fix the price 
of all this blood and sacrifice, and they did. 
In what has come to be known as the Paris 
Pact they bound themselves together by eco- 
nomic ties and pledged themselves to present 
a united economic front. They unfurled 
the banner of aggressive reprisal with the 



28 The War After the War 

sole object of crushing the one-time busi- 
ness supremacy of their foes. 

The chief recommendations were: To 
meet, by tariff discrimination, boycott or 
otherwise, any individual or organised trade 
advance of the Central Powers — already 
Germany, Austria, Turkey and Bulgaria 
have reached a commercial understanding; 
to forego any "favoured-nation" relation 
with the enemy for an indefinite period; to 
conserve for themselves, "before all others," 
their natural resources during the period of 
reconstruction; to make themselves inde- 
pendent of enemy countries in the raw ma- 
terials and manufactured products essential 
to their economic well-being; and to facili- 
tate this exchange by preferential trade 
among themselves, and by special and state 
subsidies to shipping, railroads and tele- 
graphs. Another important decree prohibits 
the enemy from engaging in certain indus- 
tries and professions, such as dyestuffs, in 
allied countries when these industries relate 
to national defence or economic indepen- 
dence. 

In short, self-sufficiency became the aim 
of the whole allied group, to be achieved 



The Coming War 29 

without the aid or consent of any other na- 
tion or group of nations, be they friends or 
foes. 

Here, then, is the strategy that will rule 
after the war. A huge allied monopoly is 
projected — a sort of monster militant trust, 
with cabinets of ministers for directorates, 
armies and navies as trade scouts, and whole 
roused citizenships for salesmen. 

Throughout this new Bill of World Trade 
Rights there is scant mention of neutrals — 
no reference at all to the greatest of non- 
belligerent nations. Yet the document is 
packed with interest, fraught even with 
highest concern, for us. Upon the ability 
to be translated into offensive and defensive 
reality will depend a large part of our fu- 
ture international commercial relations. 

Is the Paris Pact practical ? Will it with- 
stand the logical pressure of business de- 
mand and supply when the war is ended? 
How will it affect American trade? 

To try to get the answer I talked with 
many men in England and France who were 
intimately concerned. Some had sat in the 
conference; others had helped to shape its 
approach; still others were dedicated to its 



30 The War After the War 

far-spreading purpose. I found an astonish- 
ing conflict of opinion. Even those who 
had attended this most momentous of all 
economic conferences were sceptical about 
complete results. Yet no one questioned the 
intent to smash enemy trade. Will our in- 
terests be pinched at the same time ? 

Regardless of what any European states- 
man may say to the contrary, one deduction 
of supreme significance to us arises out of 
the whole proposition. Summed up, it is 
this: 

Mutual preference by or for the members 
of either of the great European alliances 
automatically creates a discrimination 
against those outside ! Whether we face the 
Teuton or the Allies' group — or both — in 
the grand economic line-up, we shall have 
to fight for commercial privileges that once 
knew no ban. 

There are two well-defined beliefs about 
the practical working out of the pact as a 
pact. Let us take the objections first. They 
find expression in a strong body of opinion 
that the whole procedure is both unhuman 
and uneconomic — a campaign document, as 
it were, conceived in the heat and passion of 



The Coming War 31 

a great war, projected for political effect in 
cementing the allied lines. In short, it is 
what business men would call a glorified and 
stimulated "selling talk," framed to sell good 
will between the nations that now propose' 
to carry war to shop and mill and mine. 

"But," as a celebrated British economist 
said to me in London, "while all this talk 
of Economic Alliance sounds well and is 
serving its purpose, the fact must not be 
overlooked that, though war ends, business 
keeps right on. Self-interest will dictate the 
policy that pays the best." This is a typical 
comment. 

Now we get to the meat of the matter: 
By the terms of the pact half a dozen im- 
portant nations — to say nothing of the 
smaller fry — are bound to a hard-and-fast 
trade agreement. Business, in brief, is pro- 
jected in terms of nations. 

Go behind this new battle front and you 
will find that it conflicts with an uncompro- 
mising commercial rule. Why? Simply be- 
cause, so far as business is concerned, na- 
tions may propose, but human beings dis- 
pose. Individuals, not countries, do busi- 
ness! Being human, these individuals are 



32 The War After the War 

apt to follow the line of least resistance. 
Hence, the best-laid plans for imposing in- 
ternational industrial teamwork are likely 
to founder on those weaknesses of human 
nature that begin and end in the pocket- 
book. 

After the Franco-Prussian War of 1870- 
71, and while the Peace of Versailles was 
being negotiated, commercial travellers of 
each nation, laden with samples, filled the 
border villages, ready to dash across the 
frontier and open accounts. Of course no 
one dreams that such history will repeat it- 
self after the present war; but there are 
many persons in England and France to-day 
who contend that the business needs of peace 
will be stronger than the costly hang-over of 
wartime passions. 

Trade, after all, is a Colossus that rests 
with one foot upon Necessity and the other 
foot upon Convenience. 

Will the Allies be such valued commercial 
helpmates to each other? Perhaps not. 
When this war is over the fighting countries 
will be impoverished by years of drain and 
waste. As a result, they will be poorer cus- 
tomers for each other, but very sharp com- 



The Coming War 33 

petitors. International trade is merely an 
exchange of goods for goods. You cannot 
sell without buying, and vice versa. No 
groups of nations can live by taking in each 
other's washing. They are bound to get 
outside linen. When peace comes we shall 
have the lending and purchasing power of 
the world. Can anybody afford to shut us 
out? 

Again: Can the Allies present a united 
front or carry on a uniform line of conduct? 
Will not their interests overlap and cause 
an inevitable conflict, even when intentions 
are of the very best ? 

France, for example, competes with Eng- 
land in chemicals, surgical instruments, high- 
speed tools, scores of things; Russia's com- 
petitors in wheat are not Germany, but Can- 
ada, India and Australia; Italy and France 
are rivals for the same wine markets. Rus- 
sia for years has kept down the high cost 
of her living by buying cheap German goods 
at her front door and having her projects 
financed by German capital. Will she face 
bankruptcy by going hundreds — even thou- 
sands — of miles out of her way and paying 
more for products? England for years has 



34 The War After the War 

made huge profits out of the re-export of 
Teutonic articles, thanks to the grace of free 
trade and huge carrying power. Is she 
likely to forego all this? 

In the last analysis Propinquity and the 
Purse are the Mothers of Trade Alliance. 

Finally, will not any organised exclusion 
of German products, coupled with a definite 
and organised campaign to throttle German 
trade the world over, throw the business of 
the Kaiser's country smack into the lap of 
the United States? Sober reflection over 
these possibilities may stay economic re- 
prisal. 

On the other hand, there are many ways 
by which even a near translation of the eco- 
nomic pact into actuality may work hardship 
— even disaster — to American commercial 
interests. No matter which way we turn 
when peace comes we shall face the prover- 
bial millstones in the shape of two great al- 
liances. One is the Allied Group, jealous of 
our new wealth and world power, bitter with 
the belief that we have coined gold out of 
agony; the other is the Teutonic Union, 
smarting because of our aid to its enemies, 



The Coming War 35 

stinging under reverses, mad with a desire 
to recuperate. 

Examine our trade relations with warring 
Europe and you see how hazardous a shift 
in old-time relations would be. To the fight- 
ing peoples and their colonies in normal 
times we send nearly seventy-eight per cent 
of our exports, and from them we derive 
seventy per cent of our exports. The Al- 
lies alone, principally England and her col- 
onies, get sixty-three per cent of these ex- 
ports and send us fifty-four per cent of all 
we get from foreign lands. 

As the National Foreign-Trade Council 
of the United States points out: "Any 
sweeping change of tariff, navigation or 
financial policy on the part of either group 
of the Allies, and particularly on the part 
of the Entente Allies, may seriously affect 
the domestic prosperity of the United States, 
in which foreign trade is a vital element." 

Why is this foreign trade so vital? Be- 
cause, during these last two years of world 
upheaval we have rolled up the immense 
favourable trade balance of over three bil- 
lion dollars. In peace time this would be 
paid for in merchandise. But fighting 



36 The War After the War 

Europe's industries, with the exception of a 
part of England's, are mobilised for muni- 
tions. Therefore, these goods have been 
paid for largely in gold. 

This gold is now part of our basis of 
credit. When the war ends Europe will 
make every effort that ingenuity, backed up 
by trade resource, can devise to get that gold 
back. One way is through loans from us; 
the other is by exports to us. Now you see 
why we must maintain our foreign com- 
merce. 

Our huge gold reserve hides another men- 
ace: The war demands for our commodi- 
ties, paid for with the yellow metal, have 
increased the cost of production ; and it will 
stay up. This will lead to an unequal com- 
petition with the cheap labour markets of 
Europe when the war is over. Both groups 
of Allies will be able to undersell us. 

Turn to the raw materials and you en- 
counter a further danger in the economic 
pact. If the Allies develop their own 
sources, it will cut down our export of 
cotton, copper and oil. If they cannot de- 
velop sufficient sources for self -supply they 
may, through co-operative buying outside 



The Coming War 37 

their dominions, satisfy their needs. In 
the third place, they may stimulate, through 
tariff or shipping concessions, or by subsi- 
dies — which are much talked of in Europe 
to-day — a preference for their own manu- 
factures over American products in both 
allied and neutral markets. 

Take navigation: England controls an 
immense shipping. As a matter of fact, out- 
side the three-mile limit, she practically owns 
the waters of the world. If she makes lower 
rates for her allies, or others to whom she 
gives preference, where shall we be in our 
chronic and unpardonable dependence upon 
foreign bottoms? Here is where we shall 
pay the price for neglecting our merchant 
marine. 

Still another menace to our trade lies in 
preferential alliances between Mother Coun- 
tries and their colonies, which is part of the 
projected programme. Our next-door neigh- 
bour, Canada, has just given an illuminating 
instance of what may be in store for us. 
A Co-operative Export Association has been 
formed in the Dominion to get business 
throughout the British Empire and the other 
allied nations. In the circular announcing 



38 The War After the War 

its organisation it declares that "the prod- 
ucts of Canada will be preferred against the 
products of her great neutral competitor, the 
United States, who has stayed outside of 
the war and has borne no sacrifice of life 
and money made by the allied countries." 

Return to the economic pact again and you 
find that it continues to bristle with danger- 
ous possibilities for us. You will recall that 
one of the clauses forbids the resumption 
of a favoured-nation arrangement with 
enemy countries for a period "to be fixed 
by mutual agreement." This may be for 
an indefinite time. 

Now the danger here lies in the European 
interpretation of the favoured-nation idea. 
To quote an authority: "Most of these 
countries have treaties under which each 
must grant most- favoured-nation treatment 
to the other; and this means that a reduc- 
tion in duties granted to one country is auto- 
matically extended to all other countries with 
whom such treaties exist. The result is 
that the lowest rate in any treaty becomes, 
with exception, the rate extended to all coun- 
tries." 

We have the favoured-nation relation with 



The Coming War 39 

many European countries, and herein lies 
the possible danger : The war automatically 
annulled all treaties between belligerents. 
When the day of treaty making comes again 
shall we suffer for the sins of friend and 
foe in the rearrangement of international 
trade and lose some precious commercial 
privileges? It is worth thinking about. 



II — England Awake 



MEANTIME, regardless of how 
the economic pact works out, 
England's policy is "Deeds, not 
Words," as she prepares for the 
time when normal life and business succeed 
the strain and frenzy of fighting days. 

No man can range up and down the Brit- 
ish Isles to-day without catching the thrill 
of a galvanic awakening, or feeling an im- 
perial heartbeat that proclaims a people 
roused and alive to what the future holds and 
means. The kingdom is a mighty crucible 
out of which will emerge a new England 
determined to come back to her old indus- 
trial authority. It is with England that our 
commerce must reckon ; it is English compe- 
tition that will grapple with Yankee enter- 
prise wherever the trade winds blow. 

There are many reasons why. "For Eng- 
land," as one man has put it, "victory must 
mean prosperity. However triumphant she 
may be in arms, her future lies in a pre- 
eminence in world industries. Through it 

40 



England Awake 41 

she will rise as an empire or sink to a second- 
rate nation." 

In the second place, as all hope of indem- 
nity fades, England realises that she will 
not only have to pay all her own bills but 
likewise some of the bills of her allies. Al- 
ready her millions have been poured into the 
allied defence ; many more must follow. 

Hence, the relentless energy of her throb- 
bing mills; the searching appraisal of her re- 
sources ; the marshalling of all her genius of 
trade conquest. Dominating all this is the 
kindling idea of a self-contained empire, 
linked with the slogan : "Home Patronage 
of Home Product." The war found her un- 
prepared to fight; she is determined that 
peace shall see her fit for economic battle. 

This is what she is doing and every act 
has a meaning all its own for us. Take In- 
dustry: Forty-eight hundred government- 
controlled factories, working day and night, 
are sending out a ceaseless flood of war sup- 
plies. The old bars of restricted output are 
down; the old sex discrimination has faded 
away. Women are doing men's work, get- 
ting men's pay, making themselves useful 
and necessary cogs in the productive ma- 



42 The War After the War 

chine. They will neither quit nor lose their 
cunning when peace comes. 

I have watched the inspiring spectacle 
of some of these factories, have walked 
through their forest of American-made 
automatics, heard the hum of American tools 
as they pounded and drilled and ground the 
instruments of death. What does it signify? 
This: that quantity output of shot and 
shell for war means quantity output of mo- 
tors and many other products for peace. 
You may say that quantity output is a mat- 
ter of temperament and that the British na- 
ture cannot be adapted to it ; but speeded-up 
munitions making has proved the contrary. 
The British workman has learned to his 
profit that it pays to step lively. High war 
wages have accustomed him to luxuries he 
never enjoyed before, and he will not give 
them up. Unrestricted output has come to 
stay. 

Five years ago the efficiency expert was 
regarded in England as an intruder and a 
quack; to use a stop watch on production 
was high crime and treason. To-day there 
are thousands of students of business science 
and factory management. In the spinning 



Englcmd Awake 43 

district girls in clogs sit alongside their fore- 
men listening to lectures on how to save 
time and energy in work. Scores of old es- 
tablishments are being reborn productively. 
There is the case of a famous chocolate 
works that before the war rebuffed an in- 
structor in factory reorganisation. Last 
year it saw the light, hired an American 
expert, and to-day the output has been in- 
creased by twenty-five per cent. 

The infant industries, growing out of the 
needs of war and the desire of self-suffi- 
ciency, are resting on the foundations of the 
new creed. "Speed up!" is the industrial 
cry, and with it goes a whole new scheme 
of national industrial education. The Brit- 
ish youth will be taught a trade almost with 
his A-B-C's. 

Formerly in England the standardisation 
of plan and product was almost unknown. 
For example, no matter how closely ships 
resembled each other in tonnage, structure 
or design, a separate drawing was made 
for each. Now on the Clyde the same specifi- 
cations serve for twenty vessels. England 
has gone into the wholesale production ; and 
what is true of ships in the stress of hungry 



44 The War After the War 

war demand will be true of scores of articles 
for trade afterward. The old rule-of -thumb 
traditions that hampered expansion have 
gone into the discard, along with voluntary 
military service and the fetish of free trade. 

Typical of the new methods is the stand- 
ardisation of exports, which have increased 
steadily during the past year. In a room of 
the Building of the Board of Trade, down 
in Whitehall, and where the whole trade 
strategy of the war is worked out, I saw a 
significant diagram, streaked with purple 
and red lines, which shows the way it is done. 
The purple indicated the rosters of the great 
industries; the red, the number of men re- 
cruited from them for military service. No 
matter how the battle lines yearn for men, 
the workers in the factories that send goods 
across the sea are kept at their task. This 
diagram is the barometer. For exports keep 
up the rate of exchange and husband gold. 

England is creating a whole new line of 
industrial defence. The manufacture of 
dyestuffs will illustrate: This process, 
which originated in England, was permitted 
to pass to the Germans, who practically got 
a world monopoly in it. Now England is 



England Awake 45 

determined that this and similar dependence 
must cease. 

For dyemaking she has established a sys- 
tematic co-operation among state, education 
and trade. In the University of Leeds a 
department in colour chemistry and dyeing 
has been established, to make researches and 
to give special facilities to firms entering the 
industry, all in the national interest. A 
huge, subsidised mother concern, known as 
British Dyes, Limited, has been formed, and 
it will take the place of the great dye trust 
of Germany, in which the government was 
a partner. 

This procedure is being repeated in the 
launching of an optical-glass industry; this 
trade has also been in Teutonic hands. I 
could cite many other instances, but these 
will show the new spirit of British commer- 
cial enterprise and protection. 

Everywhere nationalisation is the keynote 
of trade activity. Coal furnishes an in- 
stance: The collieries of the kingdom not 
only stoke the fires of myriad furnaces but 
drive the ships of a mighty marine. 
Through her control of coal England has 
one whip hand over her allies, for many of 



46 The War After the War 

the French mines are in the occupied dis- 
tricts, and Italy's supply from Germany has 
stopped. Coal means life in war or peace. 
Now England proposes a state control of 
coal similar to that of railroads. 

It spells fresh power over the neutral 
shipping that coals at British ports. If the 
government controls the coal it will be in a 
position to stipulate the use that the con- 
sumer shall make of it, and require him to 
call for his return cargo at specified ports. 
Such supervision in war may mean similar 
domination in peace — another bulwark for 
British control of the sea. 

Throughout England all trade facilities 
are being broadened and bettered. The local 
Chambers of Commerce, whose chief func- 
tion for years was solemnly to pass resolu- 
tions, have stirred out of their slumbers. 
The Birmingham body has formed a House 
of Commerce to stimulate and develop the 
commerce of the capital of the Midlands. 

This stimulation at home is accompanied 
by a programme of trade extension abroad. 
The Board of Trade has granted a licence 
to the Latin- American Chamber of Com- 
merce in Great Britain, formed to pro- 



England Awake 47 

mote British trade in Central and South 
America and Mexico. Sections of the cham- 
ber are being organised for each of the im- 
portant trades and industries in the king- 
dom, and committees named to enter into 
negotiations with every one of the Latin- 
American republics, where offices will be 
established in all important towns. 

The Board of Trade has also learned the 
lesson of co-operation for foreign trade. As 
one result, British syndicates, composed of 
small manufacturers, who share the over- 
head cost, are forming to open up new mar- 
kets the world over. These syndicates cor- 
respond with the familiar German Cartel, 
which did so much to plant German products 
wherever the sun shone. 

England, too, has wiped out one other 
block to her trade expansion: For years 
many of her consuls were naturalised Ger- 
mans. Many of them were trustworthy pub- 
lic servants. Others, true to the promptings 
of birth, diverted trade to their Fatherland. 
To-day the Consular Service is purged of 
Teutonic blood. It is one more evidence of 
the gospel of "England for the English!" 

All this new trade expansion cannot be 



48 The War After the War 

achieved without the real sinew of war, 
which is capital. Here, too, England is 
awake to the emergency. Typical of her 
plan of campaign is the projected British 
Trade Bank, which will provide, facilities 
for oversea commercial development, and 
which will not conflict with the work ordi- 
narily done by the joint-stock, colonial and 
British foreign banks. It will do for Brit- 
ish foreign trade what the huge German 
combinations of capital did so long and so 
effectively for Teuton commerce. Further- 
more, it will make a close corporation of 
finance and trade, with the government sit- 
ting in the board of directors and lending 
all the aid that imperial support can bestow. 
The bank will be capitalised at fifty mil- 
lion dollars. It will not accept deposits sub- 
ject to call at short notice, which means con- 
stant mobilisation of resources ; it will open 
accounts only with those who propose to 
make use of its oversea machinery; it will 
specialise in credits for clients abroad, and 
it will become the centre of syndicate oper- 
ations. One of its chief purposes, I might 
add, will be to enable the British manufac- 
turer and exporter to assume profitably the 



England Awake 49 

long credits so much desired in foreign 
trade. 

From the confidential report of its organi- 
sation let me quote one illuminating para- 
graph which is full of suggestion for Amer- 
ican banking, for it shows the new idea of 
British preparedness for world business. 
Here it is: 

"Nearly as important as the Board would 
be the General Staff. It is fair to assume 
that women will in the future take a con- 
siderable share in purely clerical work, and 
this fact will enable the institution to take 
fuller advantage of the qualifications of its 
male staff to push its affairs in every quar- 
ter of the globe. Youths should not be en- 
gaged without a language qualification, and 
after a few years' training they should be 
sent abroad. It could probably be arranged 
that associated banks abroad would agree to 
employ at each of their principal branches 
one of the Institution's clerks, not neces- 
sarily to remain there for an indefinite peri- 
od, but to get a knowledge of the trade and 
characteristics of the country. Such clerks 
might in many cases sever their connection 
with the banks to which they were appointed 



50 The War After the War 

and start in business on their own account. 
They would, however, probably look upon 
the institution as their 'Alma Mater/ 
Every endeavour should be made to promote 
esprit de corps; and where exceptional abil- 
ity is developed it should be ungrudgingly 
rewarded. If industry is to be extended it 
is essential that British products should be 
pushed; and manufacturers, merchants and 
bankers must combine to push them. It is 
believed that this pushing could be assisted 
by the creation of a body of young business 
men in the way above described." 

The scope and purpose of this British 
Trade Bank suggest another East India 
Company with all the possibilities of gold 
and glory which attended that romantic 
eighteenth-century enterprise. Perhaps an- 
other Clive or a second Hastings is some- 
where in the making. 

That the British Government proposes to 
follow the German lead and definitely go into 
business — thus reversing its tradition of 
aloofness from financial enterprise — is 
shown in the new British and Italian Cor- 
poration, formed to establish close economic 
relations between Britain and Italy. It 



England Awake 51 

starts a whole era in British banking, for 
it means the subsidising of a private under- 
taking out of national funds. 

It embodies a meaning that goes deeper 
and travels much farther than this. Up to 
the outbreak of the great war Germany 
was the banker of Italy. Cities like Milan 
and Rome were almost completely in the 
grip of the Teutonic lender, and his country 
cashed in strong on this surest and hardest 
of all dominations. This was the one big 
reason why the Italian declaration of war 
against Germany was so long delayed. With 
this new banking corporation England not 
only supplants the German influence but 
forges the economic irons that will bind 
Italy to her. 

The capital of the British and Italian Cor- 
poration is nominally only five million dol- 
lars. The government, however, agrees to 
contribute during each of the first ten years 
of its existence the sum of two hundred and 
fifty thousand dollars. Though imperial 
stimulation of trade is one of its main ob- 
jects, this institution is not without its larger 
political value. As this and many other sim- 
ilar enterprises show, politics and world 



52 The War After the War 

trade, so far as Great Britain is concerned, 
will hereafter be closely interwoven. 

Throughout all this British organisation 
runs the increasing purpose of an Empire 
Self-Contained. Whether that phase of the 
Paris Pact which calls for development and 
mobilisation of natural resources sees the 
light of reality or not, Britain is determined 
to take no chances for her own. She is 
scouring and searching the world for new 
fields and new supplies. She is planning to 
increase her tea and coffee growing in 
Ceylon and make cotton plantations of huge 
tracts in India and Africa. The control of 
the metal fields of Australia has reverted to 
her hands ; she will get tungsten and oil from 
Burma. It took the war to make her real- 
ise that, with the exception of the United 
States, Cuba and Hawaii, all the sugar-cane 
areas of the world are within the imperial 
confines. They will now become part of the 
Empire of Self-Supply. Even a partial car- 
rying out of this far-flung plan is bound 
seriously to affect our whole export busi- 
ness. 

You have seen how this self-contained 
idea may work abroad. Go back to Eng- 



England Awake 53 

land and you find it forecasting an agricul- 
tural revolution that may be one of the 
after-war miracles. 

For many years England has raised about 
twenty per cent of her wheat supplies. One 
reason was her dependence on grass instead 
of arable land; another was the inherent ob- 
jection of the British farmer to adopt scien- 
tific methods of soil cultivation or engage in 
co-operative marketing. The old way was 
the best way; he wanted to go. "on his 
own." 

The war has opened his eyes, and like- 
wise the eyes and purse of the ultimate con- 
sumer. Denmark did some of this awaken- 
ing. England depended upon her for enor- 
mous supplies of bacon, cheese, butter and 
eggs. When the war broke out and the ring 
of steel hemmed Germany in, the specula- 
tive prices offered by the Fatherland were 
too much for the little domain. Holland 
also "let down" her old customer, poured 
her food into Germany, and fattened on im- 
mense profits. Norway and Sweden, which 
were also important sources of more or less 
perishable British food supplies, have done 
the same thing. When peace comes you 



54 The War After the War 

may be sure that England will have a reck- 
oning. 

This scarcity of food, coupled with the 
incessant sinking of supply ships by enemy 
submarines, the rigid censorship of imports, 
and all those other factors that bring about 
the high cost of war, has made the English- 
man sit up and take notice of his agricultural 
plight. 

"We must grow more of our food," is the 
new determination. To achieve it plans for 
collective marketing, for intensive farming, 
for co-operative land-credit banks, are being 
made. The gentleman farmer will become 
a working farmer. 

England's gospel of self-sufficiency has a 
significance for us that extends far beyond 
her growing independence in foodstuffs and 
raw materials. It is fashioning a weapon 
aimed straight at the heart of our overseas 
industrial development. 

Most people who read the newspapers 
know that many articles of American make, 
ranging from bathtubs to motor cars, have 
been excluded from England. The reasons 
for this — which are all logical — are the ne- 
cessity for cutting down imports to protect 



England Awake 55 

the trade balance and keep the gold at home ; 
the need of ship tonnage for food and war 
supplies ; and the campaign to curtail luxury. 

Admirable as are these reasons, there is 
a growing feeling among Americans doing 
business in England that this wartime pro- 
hibition, which is part of the programme of 
military necessity, is the prelude to a more 
permanent, if less drastic, exclusion when 
peace comes. 

Habit is strong with Englishmen, and the 
shrewd insular manufacturer has been quick 
to see the opportunities for advancement 
that lie in this closed-door campaign. 

"Get the consumer out of the habit of us- 
ing a certain American product during the 
war," he argues, "and when the war is over 
— even before — he will be a good 'prospect' 
for the English substitute." 

Here is a concrete story that will illustrate 
how the exclusion works and what lies be- 
hind: 

Last summer a certain well-known Amer- 
ican machine, whose gross annual business 
in Great Britain alone amounts to more than 
half a million dollars a year, was suddenly 
denied entrance into the kingdom. When 



56 The War 'After the War 

the managing director protested that it was 
a necessity in hundreds of British ships he 
was told that it made no difference. 

"But what are the reasons for exclusion ?" 
he asked. 

"We don't want English money to go out 
of England," was the reply. 

"Then we shall not only bank all our re- 
ceipts here but will bring over one hundred 
thousand pounds more," came from the di- 
rector. 

It had no effect. 

"Is it tonnage?" was the next query. 

"Yes," said the official. 

"Then we shall ship machines in our pres- 
ident's yacht," was the ready response. 

This staggered the official. After a long 
discussion the director received permission 
to bring in what machines were on the way ; 
and, also, he got a date for a second hearing. 

Meantime he adapted a type of machine 
to the needs of a certain department in the 
Board of Trade, sold two, and got them 
installed and working before he next ap- 
peared before the Trade Censors, who, by 
the way, knew absolutely nothing at all about 



England Awake 57 

the article they were prohibiting. The first 
question popped to him was : 

"Are machines like yours made in Eng- 
land?" 

"Yes," replied the director ; "but they have 
never been practical or commercial." 

Then he produced the record of the ma- 
chines he had sold to the government. Each 
one saved the labour of eight persons and 
considerable office space. This made a dis- 
tinct impression and the company got per- 
mission to import two hundred tons of their 
product. But not even an application for 
more can be filed until the first of next year. 
Only the dire necessity for this article, 
coupled with the fact that it is without Brit- 
ish competition, got it over. 

I cite this incident to show what many 
Americans in England believe to be one of 
the real reasons behind the prohibition, 
which, summed up, is simply this : England 
is trying to keep out everything that com- 
petes with anything that is made in Eng- 
land or that can be made in England ! 

For some time after the war began our 
motor cars went in free. Then followed an 
ad-valorem duty of thirty-three and a third 



58 The War After the War 

per cent. Despite this handicap, agents were 
able to sell American machines, which were 
both popular and serviceable. The tariff 
was imposed ostensibly to cut down imports, 
but mainly to please the British motor manu- 
facturers, who claimed that the surrender 
of their factories to the government for mak- 
ing munitions left the automobile market 
at the mercy of the American product, which 
meant loss of goodwill. 

Subsequently a complete embargo was 
placed on the entry of American pleasure 
cars and the business practically came to a 
standstill. What is the result? Let the 
agent of a well-known popular-priced Amer- 
ican car tell his story. 

"Before the war and up to the time of the 
embargo," he said, "I was selling a good 
many American automobiles. With the em- 
bargo on cars also came a prohibition of 
spare parts. It was absolutely impossible 
to get any into the country. Many of my 
customers wanted replacements, and, when 
I could not furnish them, they abandoned the 
cars I sold them and bought English-made 
machines whose parts could be replaced." 

All through the motor business in Eng- 



England Awake 59 

land I found a strong disposition on the part 
of the British manufacturer and dealer to 
create a market for his own car as soon as 
the war is over. Some even talked of a 
large output of low-priced machines to meet 
the competition of the familiar car that put 
the automobile joke on the map. The only 
American comeback to this growing preju- 
dice is to build factories or assembling plants 
within the British Isles. This will save ex- 
cessive freight rates, keep down the costly 
tariff "overhead," and get the benefit of all 
the goodwill accruing from the employment 
of British labour. 

A by-product of British exclusion is the 
inauguration of a Made-in-England cam- 
paign. Buy a hat in Regent Street or Ox- 
ford Street and you see stamped on the in- 
side band the words, "British Manufacture." 
This English crusade is more likely to suc- 
ceed than our Made-in-U.S.A. attempt, for 
the simple reason that the government is 
squarely behind it. 

This same spirit dominates newspaper 
publicity. You find a British fountain pen 
glowingly proclaimed in a big display ad- 
vertisement, illustrated with the picture of 



60 The War After the War 

men trundling boxes of gold down to a wait- 
ing steamer. Alongside are these words : 

"The man who buys a foreign-made foun- 
tain pen is paying away gold, even if the 
money he hands across the counter is a 
Treasury note. The British shop may get 
the paper; the foreign manufacturer gets 
gold for all the pens he sends over here. 
What is the sense of carrying an empty 
sovereign-purse in one pocket if you put a 
foreign-made fountain pen in another?" 

Behind all this British exclusion is an old 
prejudice against our wares. There has 
never been any secret about it. I found a 
large body of opinion headed by brilliant 
men who have bidden farewell to the Hands- 
Across-the-Sea sentiment; who have little 
faith in the theory that blood is thicker than 
water when it comes to a keen commercial 
clash. 

What of the human element behind the 
whole British awakening? Will organised 
labour, an ancient sore on the British body, 
rise up and complicate these well-laid 
schemes for economic expansion? As with 
the question of practicability of the Paris 
Pact, there is a wide difference of opinion. 



England Awake 61 

On one hand, you find the air full of the 
menace of post-war unemployment and the 
problem of replacing the woman worker by 
the man who went away to fight. To off- 
set this, however, there will be the un- 
doubted scarcity of male help due to battle 
or disease, and the inevitable emigration of 
the soldier, desirous of a free and open life, 
to the Colonies. 

On the other hand, there is the convic- 
tion that unrestricted output, having regis- 
tered its golden returns, will be the rule, not 
the exception, among the English artisans. 
England's frenzied desire for economic au- 
thority proclaims a job for everybody. 

I asked a member of the British Cabinet, 
a man perhaps better qualified than any 
other in England to speak on this subject, 
to sum up the whole after-war labour situa- 
tion, as he saw it, and his epigrammatic reply 
was: 

"After the war capital will be ungrudg- 
ing in its remuneration to labour; and la- 
bour, in turn, must be ungrudging in its 
output." 

No one doubts that after the war the Brit- 
ish worker will have his full share of profits. 



62 The War After the War 

As one large manufacturer told me: "We 
have so gotten into the habit of turning our 
profits over to the government that it will 
be easy to divide with our employees." Here 
may be the panacea for the whole English la- 
bour ill. 

But, whatever may be the readjustment 
of this labour problem, one thing is cer- 
tain : Peace will find a disciplined England. 
The five million men, trained to military 
service, will dominate the new English life; 
and this means that it will be orderly and 
productive. 

With this discipline will come a democracy 
— social and industrial — such as England 
has never known. The comradeship between 
peer and valet, master and man, born of 
common danger under fire, will find re- 
newal, in part at least, when they go back 
to their respective tasks. This wiping out 
of caste in shop, mill and counting room will 
likewise remove one of the old barriers to 
the larger prosperity. 

England wants the closest trade relations 
with her Dominions. But will the Colonies 
accept the idea of a fiscal union of empire, 
which practically means intercolonial free 



England Awake 63 

trade? Or will they want to protect their 
own industries, even against the Mother 
Country? Like the French, they are will- 
ing to risk life and limb for a cause, but they 
likewise want to guard jealously their purse 
and products. They have not forgotten the 
click when Churchill locked the home door 
against them. 

This leads to the question that is agitat- 
ing all England : Will peace bring tariff re- 
form? Both English and American eco- 
nomic destiny will be affected by the deci- 
sion, whatever it may be. 

Canvass England and you encounter a 
widespread movement that means, as the 
advocates see it, a broadening of the home 
market; security for the infant "key" indus- 
tries; a safeguard for British labour — in 
short, the end of the old inequality of a Free 
England against a Protected Germany. 

Protection in England, hitched to a world- 
wide freeze-out business campaign against 
Germany, would doubtless divert a whole 
new international discount business to New 
York. German exporters under these cir- 
cumstances might refuse payments from 
their other customers on London, demanding 



64 The War After the War 

bills on New York instead. To hold this 
business, however, we should need direct 
banking and cable connections with all the 
grand divisions of trade, adequate sea-carry- 
ing power, dollar credits, and a government 
friendly to business. 

Then, there is the middle English ground 
which demands a "tariff for revenue only," 
and subsidy — not protection — for the new 
industries. 

Combating all this is the dyed-in-the-bone 
free trader, who points to the fact that free 
trade made England the richest of the Allies 
and gave her control of the sea. "How can 
a nation that is one huge seaport, and which 
lives by foreign trade, ever be a protection- 
ist?" he asks. 

If he has his way we shall have to strug- 
gle harder for our share of universal busi- 
ness. More than this, it will block what is 
likely to be one of Germany's schemes for 
rehabilitation. Here is the possible pro- 
cedure : 

Germany's financial position after the war 
will be badly strained. She can be saved 
only by an effective export policy. To do 
this she must seek all possible neutral mar- 



Englcmd Awake 65 

kets; and to get them quickly she will offer 
broad — even extravagant — reciprocity pro- 
grammes. They may conflict with the pro- 
posed Franco-British programmes of pro- 
tection and embargo against neutral trade 
interests. 

But if the Franco-British pro- 
gramme leaves the allied markets for goods 
and money open, as before the war, the Ger- 
man reciprocity scheme will fail of its ef- 
fect by the sheer force of natural competi- 
tion. Hence England can throttle the re- 
establishment of German credit by a free 
and liberal trade policy, open to all the world. 
Though poor, after the war she can actually 
be stronger, in view of her great army and 
navy, her new individual efficiency, and re- 
newed commercial vitality. 

Will all this keep Germany out? There 
are many people, even in England, who think 
not. Already Germans by the thousands are 
becoming naturalised citizens of Holland, 
Spain, Switzerland and Denmark; building 
factories there and shipping the product into 
the enemy strongholds, stamped with neutral 
names. Much of the "Swiss" chocolate you 
buy in Paris was made by Teutonic hands. 



66 The War After the War 

A French manufacturer who bought a 
grinding machine in Zurich the other day 
thought it looked familiar; and when he 
compared it with a picture in a German cata- 
logue he found it was the identical article, 
made in Germany, which had been offered to 
him by a Frankfort firm six months before 
the war began. Only certificates of origin 
will bar out the German product. 

Amid the hatred that the war has engen- 
dered, England wonders at the price she will 
pay for German exclusion. Men like Sir 
John Simon solemnly assert in Parliament: 
"In proportion as we divert German trade 
after the war we throw the trade of the 
Central European Powers more and more 
into the hands of America, with the re- 
sult that, unhappily, if we became involved 
in another European war we should not be 
able to count on the friendly neutrality 
which America has shown in this war." 
Others inquire : "What of the future trade 
of India, the great part of whose cotton crop 
before the war went to Central Europe?" 

Sober-minded and f arseeing men, in Eng- 
land and elsewhere, believe that, despite the 



England Awake 67 

ravage of her men and trade, Germany will 
come back commercially. 

"You must not forget," said one of them, 
"that, no matter how badly she is beaten, 
Germany will still be a going business con- 
cern. She will have an immense plant; her 
genius of efficiency and organisation cannot 
be killed. Through her magnificent indus- 
trial education system she has trained mil- 
lions of boys to take the vacant stools and 
stands in shop and mill. England and 
France have no such reserves. Besides, if 
we pauperise Germany, no one — not even 
Belgium — will get a pound of indemnity." 

You have now seen the moving picture of 
half a world in process of significant change, 
wrought by clash of arms, and facing a com- 
plete economic readjustment with peace. 
Whether the Paris Pact is practical or vi- 
sionary, no matter if England is free trade 
or protectionist, regardless of Germany's 
ability to find herself industrially at once, 
one thing we do know — the end of the war 
will find the Empire of World Trade molten 
and in the remaking. 

Fresh paths must be shaped ; the race will 
be to the best-prepared. Whatever our posi- 



68 The War After the War 

tion, be it neutral or belligerent — and no 
man can tell which now — we shall face a 
supreme test of our resource and our readi- 
ness. What can we do to meet this crisis, 
which will mean continued prosperity or 
costly reaction? 

Many things ; but they must be done now, 
when immunity from actual conflict gives 
us a merciful leeway. More than ever be- 
fore, we shall face united business fronts. 
Therefore, co-operation among competitors 
is necessary to a successful foreign trade. 

Since the coming trade war will rage 
round tariffs, it will be well to heed the reso- 
lution recently adopted by the National For- 
eign-Trade Council: "That the American 
tariff system, whatever be its underlying 
principle, shall possess adequate resources 
for the encouragement of the foreign trade 
of the United States by commercial treaties 
or agreements, or executive concessions 
within defined limits, and for its protection 
from undue discrimination in the markets 
of the world." In short, we must have a 
flexible and bargaining tariff. 

We must train our men for foreign-trade 
fields; they must know alien languages as 



England Awake 69 

well as needs; we must perfect processes of 
packing that will deliver goods intact. With 
these goods, we must sell goodwill through 
service and contact. Secondhand-business 
getting will have no place in the new rivalry. 

Our money, too, must go adventuring, and 
courage must combine with capital. Our 
dawning international banking system, 
which first saw the light in South America, 
needs world-wide expansion. Dollar credit 
will be a world necessity if we capitalise the 
opportunity that peace may bring us. No 
financial aid should be so welcome as ours, 
because it is nonpolitical. 

This trade machinery will be inadequate 
if we have no merchant marine. Chronic 
failure to heed the warning for a national 
shipping will make our dependence upon for- 
eign holds both acute and costly. 

Our trade needs more than a government 
professedly friendly to business. It requires 
a definite co-operation with business. An 
advisory board of practical men of commer- 
cial affairs would be of more constructive 
benefit to the country than all the lawmakers 
combined. 

Here, then, is the protection against or- 



70 The War After the War 

ganised European economic aggression, the 
armour for the inevitable trade conflict. Un- 
less we gird it on, we shall be onlookers in- 
stead of participants. 



Ill — American Business in France 



I 



"^WO Americans met by chance one 
day last summer at a little table 
in front of the Cafe de la Paix in 
Paris. One had arrived only a 
month before; the other was an old resi- 
dent in France. After the fashion of their 
kind they became acquainted and began to 
talk. Before them passed a picturesque 
parade, brilliant with the uniforms of half 
a dozen nations, and streaked with the sym- 
bols of mourning that attested to the ravage 
of war. 

"There is something wrong with these 
Frenchmen," said the first American. 
"How is that?" asked his companion. 
"It's like this," was the reply. "I have 
sold goods from the Atlantic to the Pacific, 
and yet I can get nowhere over here. I 
give these fellows the swiftest line of sell- 
ing talk in the world and it makes no im- 
pression." 

"How well do you speak French ?" queried 
his new-found acquaintance. 

71 



72 The War After the War 

"Not at all." 

"Have you studied the ways and needs 
of the Frenchman?" 

"Of course not. I've got something they 
want and they ought to take it." 

The man who had long lived in France 
was silent for a moment. Then he said: 

"The fault is not with the Frenchman, my 
friend. Think it over." He did, and with 
reflection he changed his method. He put 
a curb on strenuosity; started to study the 
French temperament; he began to see why 
he had not succeeded. 

This incident illumines one of the strang- 
est and most inconsistent situations in our 
foreign trade. By a curious irony we have 
failed to realise our commercial destiny in 
the one Allied Nation where real respect and 
affection for us remain. France — a sister 
Republic — is bound to us by sentimental ties 
and the kinship of a common struggle for 
liberty. Her people are warm-hearted and 
generous and want to do business with us. 

Yet, as long and costly experience shows, 
we have almost gone out of our way to clash 
with their customs and misunderstand their 
motives. In short, we have neglected a great 



American Business in France 73 

opportunity to develop a permanent and 
worth-while export business with them. It 
was bad enough before the war. Events 
since the outbreak of the monster conflict 
have emphasised it more keenly. 

Why have Americans failed so signally 
in France? There are many reasons. First 
of all, their whole system of selling has been 
wrong. 

For years many of our manufacturers 
were represented in Paris and elsewhere in 
France by German agents, who also repre- 
sented producers in their own country. The 
energetic Teuton did not hesitate to install 
an American machine or a line of American 
goods. But what happened? When the ma- 
chine part wore out or the stock of goods 
was exhausted, there was seldom any Amer- 
ican product on hand to meet the swift and 
sometime impatient demand for replacement 
or renewal. By a strange "coincidence" 
there was always an abundant supply of Ger- 
man material available. The German sales- 
man always saw to that. Necessity knows 
no nationality. The result invariably was 
that German output supplanted the Amer- 



74 The War After the War 

ican. The Frenchman did not want to be 
caught the second time. 

This prompt renewal created an immense 
goodwill for German goods. Right here is 
one of the first big lessons for the American 
exporter to learn, no matter what country 
he expects to sell in. It lies in keeping goods 
"on the shelf," and being able to meet 
emergency demand. 

The Frenchman in trade is a sort of Mis- 
sourian. He must be "shown." He shies at 
samples; distrusts drawings. He likes to 
go into a warehouse and look over stocks; 
it gives him satisfaction to pick and choose. 
He is the most fastidious buyer in the world 
and he likes to do things his own way. Any 
attempt to ram foreign methods — either in 
buying or selling — down his sensitive throat 
is bound to react. 

Here is a case in point : The General Rep- 
resentative in France of a large American 
manufacturing concern decided to engage 
some French salesmen. He was a shark on 
business system ; he fairly oozed with "scien- 
tific salesmanship"; he decided to gird his 
Gallic emissaries with the most improved 
American selling methods. So he prepared 



American Business in France 75 

an elaborate "What I did" schedule for 
them. Into it was to be written every eve- 
ning the complete record of the business day. 

When he handed one of these blanks to 
his leading French salesman, that gentleman 
shrugged his shoulders and said: 

"It eez imposseeble." 

When the American became insistent all 
the French salesmen resigned in a body. 
This objection was purely temperamental. 
If there is one thing above all others that 
puts a Frenchman into panic it is publicity 
of his personal affairs. He believes that 
the greatest crime in the world is to be found 
out, whether in business or in love. There 
was nothing perhaps to hide in a biography 
of his daily work, but it was the wrong tack 
to take. 

In the same way militant and masterful 
salesmanship also fails. A man may be a 
crack seller in Kansas City, Denver, and all 
points West, but he finds to his sorrow that 
his dynamic process goes straight over the 
head of a Frenchman. He refuses to be 
driven; he wants time for mature reflection 
and an opportunity to talk the thing over 
with his wife. 



76 The War After the War 

This irritating attempt to force uncon- 
genial methods on French buyers is dupli- 
cated in a corresponding lack of plain every- 
day intelligence in meeting the simplest 
French requirements. 

Indeed, the omissions of Americans are 
wellnigh incredible. Take the matter of 
postage to France. The head of a great 
French concern made this statement to me 
in sober earnestness: "Won't you be good 
enough to beg American manufacturers to 
put their office boys through a course of in- 
struction in postal rates between Europe and 
the United States?" 

When I asked him the reason he said: 
"We sometimes get twenty letters from 
America in one mail and each comes under 
a two cent stamp. This has been going on 
for years despite our repeated protest about 
it. Some months my firm was required to 
pay from ten to fifteen dollars in excess 
postage." 

Now the amount of money involved in this 
transaction is the slightest feature : it is the 
chronic laxity and carelessness of the Amer- 
ican business man that gets on the French- 
man's nerve. 



American Business in France 77 

Here is another case in point: A well 
known French firm has been writing weekly- 
letters for the past eighteen months to a 
New England factory trying to persuade the 
Manager to mark his export cases with a 
stencil plate and in ink rather than with 
a heavy lead pencil, as the latter marking 
is almost obliterated by the time the ship- 
ment arrives at Havre. In fact, this French 
firm went to the extent of sending a stencil 
and brush to New England to be used in 
marking the firm's cases. But the old pencil 
habit is too strong and a weekly hunt has 
to be instituted on the French docks for odd 
cases containing valuable consignments of 
machine tools. Vexatious delays result. It 
is just one more nail that the heedless Amer- 
ican manufacturer drives into the coffin of 
his French business. 

These incidents and many more that I 
could cite, are merely the approach, however, 
to a succession of mistakes that make you 
wonder if so-called Yankee enterprise gets 
stage fright or "cold feet" as soon as it 
comes in contact with French commercial 
possibilities. Let me now tell the prize story 
of neglected trade opportunity. 



78 The War After the War 

Last spring the American Commercial At- 
tache in Paris made a speech at a dinner in 
Philadelphia. He painted such a glowing 
picture of trade prospects in France that 
the head of one of the greatest hardware 
concerns in America, who happened to be 
present, came to him afterwards with enthu- 
siasm and said: "We want to get some of 
that foreign business you talked about and 
we will do everything in our power to land 
it. Help us if you can." 

The Attache promised that he would and 
returned to his post in Paris. He studied the 
hardware situation and found a tremendous 
need for our goods. He was about to make 
a report to the hardware manufacturer when 
an alert upstanding young American breezed 
into his office and said : 

"I have been looking into the hardware sit- 
uation here and I find that there is a big 
chance for us. In fact, I have already booked 
some fat orders. Will you put me in touch 
with the right people in America to handle 
the business?" 

"Certainly," replied the Attache. "I know 
just the firm you are looking for." He re- 
called the enthusiastic remarks of the man 



American Business in France 79 

who came to him after the Philadelphia 
speech, so he said: "Write to the Blank 

Hardware Company in , and I am 

sure you will get quick action." 

"No," said the enterprising young Amer- 
ican, "I will cable." He immediately got off 
a long wire telling what orders he had and 
giving gilt edge banking references. 

Quite naturally he expected a cable re- 
ply, but he was too optimistic. Day after 
day passed amid a great silence from Amer- 
ica. At the end of two weeks he received 
a letter from the Export Manager of the 
firm who said, among other things: "We 
are not prepared to quote any prices for 
the French trade now. We have decided to 
wait with any extension of our foreign busi- 
ness until after the war. Meanwhile you 
might call on our agent in Paris who may 
be able to do something for you." 

The young American dashed up to the 
agent's warehouse. The agent was an old 
man becalmed in a sea of empty space. All 
his young men were off at the front; a few 
grey beards aided by some women comprised 
his working staff. 

"I have no American hardware in stock," 



80 The War After the War 

he said, "but I may be able to get you some 
English or Swiss goods." This did not ap- 
peal to the young American. He is now 
making a study of Russian finance. 

Full brother to this episode is the experi- 
ence of another American in Paris who 
found out that there was great need among 
French women for curling irons. Despite 
war, sacrifice and sudden death, the French 
woman is determined to look her best. Be- 
sides, she is earning more money than ever 
before and buying more luxuries. Knowing 
these facts, the Yankee sent the following 
cable to a well known concern in the Mid- 
dle West: 

"Rush fifty thousand dollars' worth of 
curling irons. Cable acceptance." He also 
cabled his financial references which would 
have started a bank. 

He, too, was doomed to disappointment. 
After a fortnight came the usual letter 
from America containing the now familiar 
phrase: "See Blank Blank, our Paris rep- 
resentative. He may be able to take care of 
you." 

Manfully he went to see Monsieur Blank 



American Business in France 81 

Blank, who not only had no curling irons but 
refused to display the slightest interest in 
them. 

Still another American took an order for 
some kid skins, intended for the manufac- 
ture of fine shoe uppers. By the terms of 
the agreement they were to be three feet in 
width. The money for them amounting to 
$30,000 was deposited in a New York bank 
before shipment. 

When the skins reached Paris they were 
found to be heavy, coarse leather and meas- 
uring five feet in width. They were abso- 
lutely useless for the desired purpose. The 
average French buyer, however, is not a 
welcher. He accepted the undesirable stuff, 
but with a comment in French that, translat- 
ed into the frankest American, means, 
"Never again!" 

All this oversight is aided and abetted by 
a twin evil, a lack of knowledge of the 
French language. Here you touch one of 
the chief obstacles in the way of our foreign 
business expansion everywhere. It has put 
the American salesman at the mercy of the 
interpreter, and since most interpreters are 
crooks, you can readily see the handicap un- 



82 The War After the War 

der which the helpless commercial scout la- 
bours. A concrete episode will show what it 
costs : 

A certain American firm, desirous of es- 
tablishing a more or less permanent connec- 
tion in France, sent over one of its principal 
officers. This man could not speak a word 
of French, so he secured the services of a 
so-called "interpreter guide." It was pro- 
posed to select a representative for the com- 
pany from among a number of firms in a 
certain large French seaport. The firm 
chosen was to receive and pay for consign- 
ments through a local bank and act generally 
for the American company. 

Friend "interpreter guide" said he knew 
all the big business houses in the city, so he 
selected a firm which the American accepted 
without making the slightest investigation. 
A bank agreed to take care of the shipments 
and the whole transaction was quickly con- 
cluded. The American grabbed the papers 
in the case (and I might add without the 
formality of having them examined by a 
third party) and left France immensely im- 
pressed with the ease and swiftness with 



American Business in France 83 

which business could be transacted with that 
country. 

But there was an unexpected and unfor- 
tunate sequel to this performance. A few 
months later another officer of this Ameri- 
can company came post-haste to France to 
straighten out an ugly tangle. It developed 
that the French firm chosen by the "interpre- 
ter guide" was not of the highest standing: 
that the interpreter, for reasons and profits 
best known to himself, had entirely misrepre- 
sented the conversation, that instead of pay- 
ing four per cent for services, the American 
firm was really paying about ten. The whole 
transaction had to be called off and a new 
one instituted at considerable expense of 
time and money. 

Another American came to Paris without 
knowing the language, used an interpreter 
every day for nine weeks, and was unable to 
place a single order. Yet in this time he 
spent enough money on his language inter- 
mediary to pay the rent of a suitable office in 
Paris for a whole year. 

The dependence of Americans with im- 
portant interests or commissions upon inter- 
preters is well nigh incredible. On the 



84 The War After the War 

steamer that took me to France last summer 
was the new Continental Manager of a large 
American manufacturing company. I as- 
sumed, of course, that he could speak French. 
A few days after I arrived in Paris I met 
him in the Boulevard des Italiens in the grip 
of a five franc a day interpreter. He told 
me with great enthusiasm that an interpreter 
was "the greatest institution in the world." 
In six months he will probably reverse his 
opinion. 

The lesson of this lack of knowledge of 
French as applied to salesmanship is this: 
That while the average Frenchman is greatly 
flattered when you tell him that his English 
is good, he prefers to talk business in his own 
vernacular. He thinks and calculates bet- 
ter in French. Frequently when you engage 
him in conversation in English and the ques- 
tion of business comes up, you find that he 
instinctively lapses into his mother tongue. 

I was talking one day with Monsieur Ri- 
bot, the French Minister of Finance, whose 
English is almost above reproach, and who 
maintained the integrity of his English 
through a long conversation. But the mo- 
ment I asked him a question about the pro- 



American Business in France 85 

posed bond issue, he shifted into French and 
kept that key until every financial rock had 
been passed. 

In short, you find that if you want to do 
business in France, you must know the 
French language. It is one of the keys to 
an understanding of the French tempera- 
ment. 

Even when Americans do become ener- 
getic in France, they sometimes fail to for- 
tify themselves with important facts before 
entering into hard and fast transactions. 
As usual, they pay dearly for such omissions. 
This brings us to what might be called The 
Great American Deluge which overwhelmed 
not a few Yankee pocketbooks and left their 
owners sadder and saner. 

Fully to understand this series of events, 
you must know that since the beginning of 
the war the question of an adequate French 
coal supply has been acute. Indeed, for a 
while the country faced a real crisis. Many 
of her mines are in the hands of the Ger- 
mans and she was forced to turn to England 
for help. Not only has the English price 
risen, but to it must be added the high cost 
of transportation, the heavy war risk, and 



86 The War After the War 

all those other details that enter into such 
negotiations. 

France had to have coal and various en- 
terprising Americans got on the job. At 
least, they thought they were enterprising. 
Before they got through, they wished that 
they had not been so headlong as the follow- 
ing tale, now to be unfolded, will indicate. 

A group of New York men made a con- 
tract to deliver three shiploads of coal at Bor- 
deaux at a certain price. After they had 
signed the contract, freight rates from Balti- 
more to the French port almost doubled. 
This was the first of their troubles. When 
their vessel finally reached Bordeaux, the 
dock was so crowded with ships unloading 
war munitions that they could not get pier 
space. In France demurrage begins the mo- 
ment a ship stops outside of port. The net 
result was that these vessels were held up 
for nearly two weeks and the high price of 
transportation coupled with the very large 
demurrage practically wiped out all the 
profits. 

Another group of Americans made a con- 
tract to deliver coal to a French railway 
"subject to call." Without taking the trou- 



American Business in France 87 

ble to inquire just what "subject to call" 
meant in France, they signed and sealed the 
bargain. Then they discovered that the rail- 
road wanted the coal delivered in irregular 
instalments. Meanwhile the consignors had 
to store the coal in French yards where space 
to-day is almost as valuable as a corner lot 
on Broadway. They were glad to pay a cash 
bonus and escape with their skin. 

Still another group made a contract with 
the Paris Gas Company for a large quantity 
of coal. They discovered later that the com- 
pany expected the coal to be delivered to 
their bins in Paris. 

"But the American plan is to sell coal 
f. o. b. Norfolk," said the spokesman. 

"We are sorry," replied the Frenchmen, 
"but the coal must be delivered to us in Paris. 
The English have been doing it for forty 
years, and if you expect to do business with 
us you must do likewise." 

When the Americans demurred the com- 
pany held them to their contract. 

This last episode shows one of the great 
defects in the American system of doing 
business abroad. We insist upon the f. o. b. 
arrangement, that is, the price at the Amer- 



88 The War After the War 

ican point of shipment. The foreigner, and 
especially the Frenchman, wants a c. i. f. 
price which includes cost, insurance and 
freight and which puts the article down at 
his door. The German and English shippers, 
and particularly the former, have made this 
kind of shipment part of their export creed, 
and it is one reason why they have succeeded 
so wonderfully in the foreign field. 

The Great American Coal Deluge also 
precipitated a flood of miserable titled ladies 
all selling coal for "well known American 
companies." Most of them were clever 
American women, married, or thinking they 
were married, to Italian or French noblemen. 
Their chief effort was to get a cash advance 
payment to bind the contract. Such details 
as price, transportation, credit, and other es- 
sentials were unimportant. 

Here is a little story which shows how 
these women did business and undid Amer- 
ican good will. 

One day last August, the telephone rang 
in the office of the General Manager of a 
long established American concern in Paris. 
A woman was at the other end. 

"Is this Mr. Blank?" 



American Business in France 89 

"Yes." 

"I am Countess A. and I have a letter of 
introduction for you." 

"Yes." 

"I represent several large American coal 
companies and have secured a large order 
for Italy." 

"Yes." 

"Can you tell me how I can get the coal 
to Italy?" 

"Yes." 

"Splendid! But how?" 

"By boats." 

"Oh, yes, I know, but have you got the 
boats and can I get them? I have the or- 
der, you see, and that is the main thing." 

"But, madam," asked the man, "have you 
cabled your company in America about the 
contract?" 

"No," answered the woman. "What's the 
use of doing that. I have no money to spend 
on cables. Besides, I have full power to 
act. The price is all right and the buyers are 
ready to sign but they want to put into the 
agreement some silly business about deliv- 
ery and I am asking you to help me get the 
boats." 



90 The War After the War 

"Come and see me," said the Manager. 

The woman promised to call the next 
morning, but she never came. Just what she 
had in mind the Manager could never quite 
tell. But one thing was proved in this and 
similar activities : The "Countess" and most 
of her sisters who have been trying to put 
over coal and other contracts in Paris, have 
little or no real authorisation for their per- 
formances, and the principal result has been 
to prejudice French and Italian buyers 
against us. 

In seeking to make French contracts, some 
of these adventurers (and they include both 
sexes) make the most extravagant claims. 
One group circulated a really startling pros- 
pectus. At the top was the imposing name 
of the corporation with a long list of 
branches in every part of the world. Then 
followed a list of names of individuals and 
firms with their assets supposed to be part 
and parcel of the corporation. One man 
whose name I had never heard before and 
who was set down as a Pittsburgher, was 
accredited with assets of $250,000,000. Un- 
der other individual and firm resources 
ranged from one to twenty-five million. The 



American Business in France 91 

list included the name of a great American 
retail merchant, without his consent I might 
add, but the promoters had cunningly mis- 
spelled his name, which kept them within the 
pale of the law. The total assets of these 
"concerns personally responsible for all or- 
ders entrusted" was precisely $340,000,000. 
In spite of this dazzling array of misinfor- 
mation, let it be said to the credit of the 
French buyer that he failed to fall for the 
glittering bait. 

The more you go into the reasons why so 
many of our business men have failed in 
France, the more you find out that plain 
everyday business organisation seems to be 
conspicuously absent. Take, for example, 
the question of credit. The average Ameri- 
can doing business in France proceeds in 
the assumption that every Frenchman is dis- 
honest. This being his theory, he either ex- 
acts cash in advance or sells "cash against 
documents." Such a procedure galls the 
Frenchman who is accustomed to long credit 
from English, German, Swiss and Spanish 
manufacturers and merchants. 

Of course, behind all these American er- 
rors in judgment and tact is a lack of or- 



92 The War After the War 



ganised credit information. To illustrate: 

When I was in London, the English Man- 
aging Director of one of the greatest of 
Wall Street Banks received an inquiry from 
his home office for information about the 
Compagnie Generale Transatlantique (the 
French Line). The amazing thing was that 
this bank, that prides itself on its world- 
wide information, had no data regarding the 
leading steamship line between England and 
France. You may be sure that the Credit 
Lyonnais or any other French banking in- 
stitution has a complete record of the Amer- 
ican Line. 

Not long ago, one of the largest banks in 
Chicago refused to extend credit to a French 
concern, although the French Government 
backed up the purchase. This concern had 
occasionally done business with a New York 
Trust Company in the Rue de la Paix, whose 
French Manager was a live, virile, far-see- 
ing young American. The President of the 
French Company laid his case before him. 
Quick as a flash he said : 

"All right! If they won't guarantee it, I 
will, and on my own responsibility." 

Whereupon he put the deal through. It 



American Business in Finance 93 

was the kind of swift, dramatic performance 
that appeals to the Frenchman. The net re- 
sult was that the service has come back a 
hundredfold to the Trust Company. 

The idea prevailing in America that 
French firms are not worthy of credit is a 
matter of great surprise all over Europe. 
Here is the way an Englishman whose firm 
has done business in France for fifty years, 
sized up the situation: 

"There are no better contracts in the 
world than those entered into in France. 
Americans who have had little experience in 
such matters may find the negotiations lead- 
ing up to the signing of a French contract 
somewhat tedious, but we do not mind this 
and one is so completely protected by the 
laws of the country, that losses are almost 
unknown. 

"Not long ago we had a case in point. A 
purchaser of lathes who had already made an 
advance payment, received his machines and 
then by various excuses put off the final pay- 
ments for the remainder from week to week. 
We waited four weeks and then made our 
complaint to the judge at the tribunal. Two 
days later the judge ordered the delinquent 



94 The War After the War 

firm to pay up in full and we received our 
money the very same day. How long do you 
think a New York court would have taken 
to decide a simple question of business of 
this kind? The fact is that in spite of the 
war, French credit remains to-day as good 
as any you can find." 

On top of their resentment over our lack 
of confidence in their credit is the added 
feeling which has cropped up since the begin- 
ning of the war over the way American man- 
ufacturers have ignored many of their 
French contracts. A French manufacturer 
summed it up in this way : 

"There is no doubt that some American 
manufacturers who had signed contracts for 
the delivery of machinery in France, delib- 
erately sold these machines at home at high- 
er prices. It has created a very bad impres- 
sion and I am afraid that henceforth your 
salesmen will find it much harder to oper- 
ate in my country. 

"The trouble is that Americans have been 
spoiled by too many orders. Before the war 
they were all crying out for business. Now 
that they have everything their own way, 
they have become independent and arrogant. 



American Business in France 95 

With the ending of the war, all this will 
change, for the French are not likely to for- 
get some of the bitter lessons they have 
learned. Henceforth they will profit by 
them." 

One reason for our laxity all up and down 
the French business line is that the Ameri- 
can has never taken the French export busi- 
ness any too seriously. On the other hand, 
stern necessity has been the driving force 
behind the English and German manufac- 
turer. The American, too, has made the 
great mistake of assuming that the for- 
eigner, and especially the Frenchman, is not 
always serious-minded and to be depended 
upon. If he wants his mind disabused in 
this matter, let me suggest that he see him 
at war. He will realise that the superb 
spirit of aggression and organisation that 
mark him now is bound to last when peace 
comes. 

You must not get the impression from 
this long list of American business calamity 
that all our endeavour has failed in France. 
Those few great American corporations who 
have planted the flag of our commercial en- 
terprise wherever the trade winds blow, have 



The War After the War 



long and successfully held up their end 
throughout the Republic. So, too, with some 
individuals. The story of what one New 
Yorker did is an inspiring and perhaps help- 
ful lesson in the right way to do business in 
France. 

This man is resolute and resourceful: he 
speaks French fluently and he was familiar 
with the foreign trade field. With the out- 
break of war he did not lose his head and 
try to get business indiscriminately. Instead, 
he made a careful survey of the field; he did 
not listen to the optimist who said it would 
be a short war : his instinct told him, on the 
contrary, that it would be a long one. "What 
will France need more than anything else ?" 
he asked himself. 

He realised that most of all France would 
need machine tools. He got the cables busy 
assembling goods, and by every known route 
he brought them to France. When he had 
a warehouse full of material, he began to 
sell. He not only had what the French were 
hungering for, but he had them to deliver 
overnight. While his colleagues were fran- 
tically trying to get their stuff in, he was get- 



American Business in France 97 

ting all the business. The French like the 
man who makes good. 

This man met their expectations and to- 
day he stands at the top of the selling heap. 

More than this, he is building a factory 
on the outskirts of Paris where he will make 
and assemble his product. Ask him the rea- 
son why he is doing this, and he will tell you : 

"First, it means good will ; second, we will 
get the benefit of native and cheap labour; 
third, we will be able to replace parts at once ; 
and, fourth, we will get inside the wall of 
the Economic Alliance." 



IV — The New France 



NO matter how we heed the example 
of the few progressive Americans 
who have successfully planted 
their business interests in France, 
we will face a new handicap when the war 
ends. As in England, we will be bang up 
against an industrial awakening that will 
mark an epoch. Coupled with this revival 
will be an efficiency born of the war needs 
that will act as a tremendous speeder-up. 

In France this galvanised industrial life 
will be stimulated by a brilliant imagination 
wholly lacking in the English temperament. 
It will go a long way toward opening up 
fresh fields of labour and distribution. 

Self-sufficiency will be the keynote. The 
automobile is a striking instance. We had 
established a very promising motor market 
(and especially with moderate- and low- 
priced cars) among the French. When the 
Government assumed control of the French 
automobile factories and changed their out- 
put to war munitions, the two great automo- 

98 



The New France 99 

bile syndicates protested that the cutting off 
of the French motor supply would mean an 
immense loss of good will. First came a 70 
per cent duty on practically all American 
cars and this was followed up by an almost 
complete restriction of all American cars. 

This prohibition will have the same effect 
as the English exclusion in that it will stim- 
ulate the demand for the native French cars. 
Here we get to one of the striking phases 
of the new industrial development of im- 
mense concern to us. France has her eye on 
quantity output. Many signs point to it. 

When the war broke out, a certain young 
French engineer saw great opportunity in 
shell making. He was immuned from mili- 
tary service, he had a little capital of his 
own, and with Government aid he set to 
work. Within four months he had built an 
enormous plant on the banks of the Seine 
almost within the shadow of the Eiffel 
Tower. In six months he had enlarged his 
capacity so that he was producing 15,000 
shells a day. Last summer he sent for the 
agent of a large American machinery com- 
pany : "I am going to make automobiles in 
series after the war." "In series" is the 



100 The War After the War 

French way of expressing quantity output. 

"All right," said the American. "What 
can I do for you?" 

"Simply this," said the Frenchman. "I 
wish to order sufficient automatics to meet 
the demand when peace comes." 

This is the spirit of the awakened French 
industry. I know of half a dozen automo- 
bile and other producing establishments who 
are making plans to manufacture popular- 
priced cars when the war is over. This out- 
put will not only affect the sale of American 
cars in France, but will also interfere with 
the market for our cheap machines in South 
America. Already France is making every 
effort to increase her Latin- American trade. 
She has immense sums of money invested in 
Brazil and she will follow up this advantage 
keenly. 

It is important for us to remember that 
France like England will have a well oiled 
productive machine after the war. It will 
not only be better but bigger than ever be- 
fore. The German ill wind that devastated 
the northern section will blow good in the 
end. Hundreds of factories operated by 
hand labour before the war will now be 



The New France 101 



equipped with American labour-saving ma- 
chinery. The products of these machines 
operated by cheap labour will be in competi- 
tion with our own commodities manufac- 
tured by more expensive labour in many of 
the markets of the world. 

Formerly the French artisan could pro- 
duce an article almost from raw material to 
finished product: now he has learned to 
stand at an automatic and labour at a single 
part. In short, he is becoming a specialist 
which makes him a cog in the machine of 
quantity output. 

What is true of machines and men is also 
true of money. The old wariness of the 
French banker in underwriting industry is 
passing away. He is thinking in terms of 
large figures and vast projects. 

I could cite many examples of the new 
Gospel of French Self -Supply. Before the 
war France manufactured lathes that were 
beautiful examples of art and precision. 
The firms that made them were old and solid 
and took infinite pride in their product. 
Now they realise that output must dominate. 
A simple type of machine has been chosen 



102 The War After the War 

as model and will henceforth be made in 
large quantities. 

Then there is the sewing machine. Be- 
fore the war two groups — Anglo-American 
and German — controlled the French market. 
By the ingenious use of export premiums, 
the Germans had the best of it. 

"Why always pay tribute to strangers?" 
now asks the French housewife. So far as 
Germany is concerned, this question is al- 
ready settled. But the American sewing ma- 
chine will have to struggle for its existence 
hereafter in France, for plans have been 
made for at least three huge factories for its 
production. 

Striking evidence of the growing French 
industrial independence of Germany is her 
advance in crucible making. For years 
Sevres vied with Limoges for ceramic hon- 
ours. To-day the vast plant which once pro- 
duced the most exquisite and delicate ware in 
the world is now producing the less lovely 
but more serviceable crucibles, condensers 
and retorts necessary for the distillation of 
the powerful acid used in modern high ex- 
plosives. Previous to the war, the Central 
Empire had a monopoly on this market. In- 



The New France 103 

deed, much of the pottery and glassware 
used in laboratories and chemical factories 
was made in Bohemia and marketed by Ger- 
many. Now the Sevres plant is shipping 
these goods to England and Russia. 

So, too, with dye stuffs. A whole new 
French colouring industry is being created. 
A Societe d'Etude has been formed to make 
a scientific survey and this will be replaced 
by a National Company to undertake the 
manufacture of all coal tar products. 

The use of a certain number of new war 
factories has been guaranteed to the com- 
pany by the Minister of War. Typical of 
the purpose which will animate the enter- 
prise is one of the articles of the National 
Company which provides that the Director 
of the Dye Stuff Industry must be of French 
birth. An agreement has also been made 
with England and Italy to protect the colour 
output of the three countries with a high 
tariff after the war. Here you find one tan- 
gible evidence of the working out of the 
Paris Economic Pact. 

Even while the invader's hand still lies 
heavy upon the land, France looks ahead to 
reconstruction. Last summer Paris flocked 



104 The War After the War 

to a graphic exhibition of how to rebuild a 
destroyed city. It was called La Cite Recon- 
stitute, and was held in the Tuileries Gar- 
den. Here you could see the modern way of 
making a Phoenix rise quickly out of the 
ashes. There were model schoolhouses, 
churches, factories, and cottages, all with 
standardised parts which could be thrown 
together in an almost incredibly short time. 

With Self-Sufficiency has come a desire 
for new business knowledge. Not long ago 
an American business man who has lived in 
Paris for many years, received a letter from 
a young French friend in the trenches at 
Verdun. The soldier wrote : 

"I realise that when this war is over we 
must be better equipped than ever before to 
meet world business competition. I want to 
be a better salesman. Please send me some 
books on American salesmanship and also 
some of the American trade papers. I have 
begun the study of Spanish because I believe 
we are going to have our part in the Latin- 
American trade." Here was a young 
Frenchman risking his life every moment in 
one of the greatest battles the world has 



The New France 105 

ever known: yet in the midst of death he 
was looking forward to a new business 
life. 

The whole attitude of the Frenchman to- 
ward life has undergone a change, first un- 
der the stress of ruthless war, and under the 
spur of his kindling desire for rehabilita- 
tion. Formerly, for example, the French 
loathed to travel. When he knew he was go- 
ing away on a journey, he spent a month tell- 
ing his relatives good-bye. Now he packs 
his bag and is off in an hour to Lyon, Mar- 
seilles, Bordeaux, or any other place where 
business might dictate. 

The new and efficient French industrial 
machine is not the only factor that Ameri- 
can business in France must reckon with 
after the war. The French woman is fast 
becoming a force, thus setting up an alto- 
gether unequal and almost unfair competi- 
tion, because to shrewd wit and resource is 
added the power of sex and beauty. 

In France, as most people know, the wom- 
an exerts an enormous influence, regardless 
of her social class. In all regulated bour- 
geois families the wife holds the purse 
strings; in the small shops she keeps the 



106 The War After the War 

cash and runs things generally. No aver- 
age Frenchman would think of embarking 
on any sort of enterprise without first talk- 
ing it over with his femme, who is also his 
partner. This team work lies at the root of 
all French thrift. 

The woman of the lower class has met the 
grim emergency of war with sacrifice and 
courage. Not only has she faced the loss 
of those most dear with uncomplaining lips, 
but she has taken her man's place every- 
where. You can see her standing Amazon- 
like in leather apron pouring molten metal in 
the shell factory; she drives you in a cab 
or a taxi; she runs the train and takes the 
tickets in the Underground : in short, she has 
become a whole new asset in the human 
wealth of the nation and as such she will 
help to make up for the inevitable shortage 
of men. 

Her sister of the upper class, at once the 
most practical and most feminine of her sex, 
is also doing her bit. She is the lovely thorn 
in the path of the American business pro-' 
moter in France. 

Before the war, it was rare to find this 
type of woman competing with men in out- 



The New France 107 

side business affairs, although her influence 
has always counted immensely in official life 
where she pulls the strings to get husband or 
lover Government preferment or concession. 

Since the war, however, necessity has 
sharply developed her latent business quali- 
ties. Now it is not unusual to find her in di- 
rect competition, using all those delightful 
charms with which Nature has endowed her. 
This is especially true of widows and women 
whose husbands are at the front. They 
often rely more upon persuasion than upon 
any technical or practical knowledge. One 
reason why they succeed is their almost un- 
canny knowledge of men. And this often 
enables them to grasp swiftly the clue that 
business opportunity offers. 

One night at dinner a Colonel's widow, a 
gracious and beguiling lady, heard that the 
French Government was in the market for 
50,000 head of cattle. The next morning she 
sent half a dozen cables to South America, 
got options, and in three days her formal 
bid was at the War Office. Within a week 
she had the contract. 

I know of a case of the wife of a Colonel 
at the front, who heard one day at lunch 



108 The War After the War 

that the War Office needed 50,000 sacks of 
flour for the army at Saloniki. That same 
day she put the matter before some Ameri- 
can brokers in Paris, who wired to their New 
York firm and received the usual American 
reply: "Am not interested in the French 
trade now. Will wait until after the war." 

With the utmost difficulty the woman was 
able to secure 10,000 sacks by way of Italy 
and Switzerland. She is not likely to seek 
American sources of supply soon again. 

An American got a tip one day that a cer- 
tain contract for machine tools was avail- 
able. He had an appointment for lunch, so 
he said to himself: "Why hurry? These 
French people are slow. I'll get busy this 
afternoon or to-morrow." 

When he went to the establishment in 
question the next day, he found that an ex- 
quisitely gowned woman had just preceded 
him; indeed, the fragrance of the perfume 
she used still hovered about the outer office. 
The man cooled his heels for half an hour 
when the lovely feminine vision flashed by 
him going out. He started to make his sell- 
ing talk to the Purchasing Agent, who said, 
at the first opening: 



The New France 109 

"I am extremely sorry, Monsieur, but we 
have just closed the contract with Madam 
Blank who left a few moments ago." 

The New France has brought forth a New 
Woman ! 

Through all the organised approach to 
Self -Sufficiency and Economic Rehabilita- 
tion, France has not lost sight of her grudge 
against the Germans. Indeed, no phase of 
her business life to-day is more picturesque 
than the campaign now in full swing not only 
against Teutonic trade, but against any re- 
sumption of commercial relation with the 
hated enemy across the Rhine. Right here 
you get a striking difference between Eng- 
lish and French methods. While Britain 
takes out some of her enmity against Ger- 
man trade in eloquent conversation, France 
has gone about it in a practical way, shot 
through with all the colour and imagination 
that only the French could employ upon such 
procedure. 

Preliminary to this campaign was a char- 
acteristic episode. Almost with the flareup 
of war, the French mind turned sentimental- 
ly to those fateful early Seventies when Ger- 
many in the flush of her great victory seized 



110 The War After the War 

the fruits of that triumph. Some of those 
fruits were embodied in the famous Treaty 
of Frankfort in which the Teuton clamped 
the mailed fist down on every favoured 
French trade relation. 

The war automatically annulled this 
treaty, and although the nation was in the 
first throes of a struggle that threatened ex- 
istence, it celebrated the revocation in char- 
acteristic fashion. Millions of copies of the 
Frankfort Treaty were printed and sold on 
the streets of Paris and elsewhere. The ex- 
cited Frenchman rushed up and down brand- 
ishing his copy and saying: "Now we will 
ram this treaty down the throat of the 
Boche!" 

This emotional prelude was now followed 
by a definite crusade for the elimination of 
German goods. Anti-German societies were 
formed all over the country. Backing these 
up are dozens of other formidable organisa- 
tions, such as Chambers of Commerce and 
Business Clubs. Typical of the campaign is 
the formation of a Buyers' League which is 
intended to assemble all persons who will 
take a resolution never to buy a German 
product and be satisfied for the remainder 



The New France 111 

of their lives with the French manufactured 
article. 

Wherever you go in France, you find some 
concrete and striking evidence of the Anti- 
German wave. When you get a bundle from 
a Paris shop, you are likely to find stuck on 
it a brilliantly coloured stamp showing a 
pair of bloody hands holding a number of 
packages, the largest one labeled "made in 
Germany." Under it is the sentence in 
French reading: "Frenchmen, do not buy 
German products. The hands that made are 
reddened with the blood of our soldiers." 

There is great variety in these stamps, 
which are used on letters and packages. One 
of the most popular shows a helmeted Ger- 
man with a brutal face holding a smiling 
mask before his visage. In one hand he 
holds a bundle marked "Made in Germany." 
On this stamp is the inscription: "Mistrust 
their smiles — in every German there is a 
spy."_ 

Still another and equally popular stamp 
pictures a soldier with bandaged head stand- 
ing by a prostrate comrade and pointing to 
a fleeing German. The inscription reads: 
"We chase the Germans during the war. 



112 The War After the War 

You, civilians, will you allow them to return 
after peace?" 

One stamp used much throughout the Pro- 
vincial French cities shows a woman in deep 
mourning weeping over a grave marked with 
a cross surmounted by a red soldier cap. 
The woman is supposed to be saying these 
words: "French people, buy no more Ger- 
man products. Remember this grave." 

A companion stamp shows a figure rep- 
resenting the French Republic and holding 
the tri-colour. The flag is attached to a 
spear with which she is piercing the breast 
of a German eagle on the ground. At her 
side is the national bird of France, the Cock, 
crowing triumphantly. Underneath are the 
words: "Refuse all German products." 

Similar in idea is another dramatic con- 
ception showing a white robed female fig- 
ure holding a battle axe in one hand and 
pointing with the other to a burning cathe- 
dral. Her words are: "Frenchmen, do 
not consume any German products. Remem- 
ber 1914." 

Most of the large French cities have their 
own Anti-German stamps which are en- 
larged and used on billboards as posters. A 



The New France 113 

typical city stamp is that of Lyon, which 
shows a Cock in brilliant colours standing 
proudly in the red and blue rays of a white 
sun. Attached is the legend: "National 
League of Defence of French Interests — 
The Anti-German League: Buy French 
Products." 

The City of Marseilles has a stamp show- 
ing the French Cock standing on a German 
helmet surrounded by the words "Anti-Ger- 
man League." Elsewhere on the stamp is 
the inscription: "No more of the people — 
No more German products." 

Whether the Frenchman buys or sells, he 
has poked under his nose or flaunted before 
his eyes every hour of the business day some 
concrete evidence that his country has put 
the German people and their products under 
the ban. 

In connection with this campaign are 
some facts of utmost significance to the 
American business man who has studied the 
intent and purpose of the Paris Economic 
Pact which is described in a previous chap- 
ter, and which declared for an Allied war 
of economic reprisal against Germany and 
the other Central Powers. In that chap* 



114 The War After the War 

ter, as you may recall, the point was made 
that since individuals and not nations do 
business, the Pact was likely to fail. 

With their usual intelligence, the French 
understand this, and their whole educational 
campaign at home is to make the individual 
Frenchman immune against the lure of the 
cheap German products. The French know 
that it is the sum of individual French re- 
sistance to German buying that will keep the 
German product forever outside the realm 
of the Republic. 

Indeed, the clearest-minded men in France 
to-day believe that more commercial advan- 
tage will accrue to France by the intensive 
development of her resources, the perfection 
of old industries and the creation of new 
ones than in the formation of committees 
devoted to plans for commercial alliances 
dedicated to reprisal. In other words, this 
helps to bear out the theory held in many 
quarters that the economic pact is after all 
merely a campaign document and utterly im- 
practicable. 

In France there are other signs that point 
to a rift in the Pact. While I was in Paris, 
a well known Senator pointed out that as 



The New France 115 

soon as the war ended France would need 
coal and would look to Italy for it as she had 
done in the past. To obtain her coal more 
cheaply than she is now doing from the 
United States or England, Italy would very 
likely make concessions to Germany in or- 
der to obtain German fuel. The result would 
be an interchange of merchandise between 
the two countries regardless of the decree 
of the Paris Pact. The question arises: 
Could France place restrictions upon the 
Italian frontier to the annoyance of her Al- 
lies? 

Meanwhile France is seeking immunity 
from any future coal crisis by developing a 
system of hydraulic power which will not 
only be economical, but will also help to cut 
down her imports. It is just one more phase 
of the ever- widening programme of Self- 
Sufficiency. 

Despite our past blunders, our present 
lack of organised initiative, and the efforts 
toward Self -Supply, the future holds a large 
business opportunity for America in France. 
As a matter of fact, half of the selling work 
is already registered because the French are 
eager and anxious to do business with their 



116 The War After the War 

great sister democracy across the sea. It is, 
therefore, up to the American exporter to 
capitalise the needs of the nation and the 
good will that it bears toward us. But it 
must be done now. 

For one thing, it cannot be achieved with- 
out constructive co-operative work. Groups 
of exporters must organise and establish of- 
fices in Paris and elsewhere in France. The 
reason for this is that the Frenchman ab- 
hors the fly-by-night salesman: he likes to 
feel that the man with whom he is trading 
has taken some sort of root in his midst. 

With organisation must come knowledge. 
Why did the Germans succeed so amazingly 
in France ? Geographical proximity and the 
Frankfort Treaty helped some, but the prin- 
cipal selling power he wielded was that he 
lived with his clients, found out what they 
wanted, and gave it to them. If a French 
farmer, for example, wanted a purple plough 
share fastened to a yellow body, the German 
assumed that he knew what he wanted and 
made it for him. The average American ex- 
porter, on the other hand, has always as- 
sumed that the foreign customer had to 
take what was given to him. For this rea- 



The New France 117 

son we have failed in South America and 
for this reason we will fail in France unless 
we change our methods. Knowledge is sell- 
ing power. 

We must be prepared to give the French 
long credits, and if necessary, finance French 
enterprises. Despite her immense gold 
hoardings, she may feel an economic pinch 
after the war. We must also have sound 
and organised French credit information. 

Our salesmen must know the French lan- 
guage and sympathise with the French tem- 
perament. Give the French buyer a ghost 
of a chance and he will meet you more than 
half way. Unlike the stolid Englishman he 
is plastic, adaptable and imaginative. Un- 
derstanding is a large part of the trade 
battle. 

We must accumulate large stocks of 
American goods in France to indulge the 
purchaser in his favourite occupation of 
long and elaborate choosing and to meet de- 
mands for renewal. To ship these goods we 
must have our own bottoms. Here, as else- 
where in the whole export outlook, is the old 
need of a merchant marine. 

But we will never realise our trade des- 



118 The War After the War 

tiny in France without reciprocity. We can- 
not sell without buying. France looks to us 
to take part of the huge flood of goods that 
once went to Germany. We take some of 
her wine : we must take more. We buy her 
silks and frocks: the American market for 
them must now be widened. We depended 
upon Germany for many of our toys : France 
expects the Anglo-Saxon nursery henceforth 
to rattle with the mechanical devices which 
will provide meat and drink for her maimed 
soldiers. And so on down a long list of 
commodities. 

All this means that before the mood cools 
we must conclude new commercial treaties 
with France and assure for ourselves a real- 
ly favoured nation relation that carries the 
guarantee of a permanent foreign trade now 
so necessary to our permanent prosperity. 

In the last analysis you will find that it 
is France and not England to whom we must 
look for the larger commercial kinship after 
the war. The spirit of the awakened Britain, 
so far as we are concerned, is the spirit of 
militant trade conquest: the dominant de- 
sire of the speeded-up France is benevolent 
Self-Suificiency. 



The New France 119 

Whether England realises her vast dream 
remains to be seen. But one thing is certain : 
No man can watch France in the supreme 
Test of War without catching the thrill of 
her heroic endeavour, or feeling the influ- 
ence of that immense and unconquerable se- 
renity with which she has faced Triumph 
and Disaster. They proclaim the deathless- 
ness of her democracy, the hope of a new 
world leadership in art and craft. 

She will be a worthy trade ally. 



V — Saving for Victory 



BY making patriotism profitable, Eng- 
land has enlisted an Army of Savers 
and launched the greatest of all 
Campaigns of Conservation. No 
contrast in the greatest of all conflicts is so 
marked as this flowering of thrift amid the 
ruins of a mighty extravagance. The story 
of Britain's "Economy First" campaign is a 
chapter of regeneration through destruction 
that is full of interest and significance for 
every man, woman, and child in the United 
States. Through self-denial a complete rev- 
olution in national habits has begun. Out of 
colossal evil has come some good. 

It has taken a desperate disease to invoke 
a desperate remedy. The average Ameri- 
can, firm in his belief that he holds a mo- 
nopoly on world waste, has had, almost with- 
out his knowledge, a formidable rival in 
England these past years. Whether the 
visiting Yankee tourist helped to set the pace 
or not, the fact remains that when the war 

120 



Saving for Victory 121 

broke over England she was as extravagant 
as she was unprepared. 

The Englishman, like his American 
brother, though unlike the Scotch, is not 
thrifty by instinct. He regards thrift as a 
vice. He prefers to let the tax gatherer do 
his saving for him. He believes with his 
great compatriot Gladstone that "it is more 
difficult to save a shilling than to spend a 
million." 

Contrasting the Englishman and the 
Frenchman in the matter of economy, you 
find this interesting parallel: With the 
Frenchman the first question that attends 
income is "How much can I save?" Saving 
is the supreme thing. With the Briton, how- 
ever, it becomes a matter of "How much can 
I spend?" Saving is incidental. 

To associate thrift with the British work- 
ingman is to conceive a miracle. To be sure, 
he seldom had anything to save before the 
war. But with the speeding-up of industry 
to meet the insatiate hunger for munitions 
and the corresponding increase of from 
thirty to fifty per cent, even more, in wages, 
he suddenly began to revel in a wealth that 
he never dreamed was possible. The more 



122 The War After the War 

he made the more he spent. He squandered 
his financial substance on fine cigars, expen- 
sive clothes, and excessive drinks, while his 
wife bedecked herself in gaudy finery and 
installed pianos or phonographs in her house. 
No one thought of To-morrow. 

Just as it took the shock of a long succes- 
sion of military reverses to rouse the Eng- 
lish mind to the consciousness that the war 
would be long and bitter, so did the abuse of 
all this temporary and inflated war time pros- 
perity bring to far-seeing men throughout 
England the realisation that the British peo- 
ple, and more especially those who worked 
with their hands, were booked for serious 
social and economic trouble when peace 
came, unless they saw the error of their 
wasteful ways. 

"What can we do to stem this tide of ex- 
travagance and at the same time plant the 
seed of permanent thrift," asked these men 
who ranged from Premier to Prelate. No 
one knew better than they the difficulties of 
the task before them. In England, as in 
America, thrift is more regarded as a vice 
than a virtue. Like the taste for olives it 



Saving for Victory 123 

is an acquired thing. To spend, not to save, 
is the instinct of the race. 

But there were other and equally serious 
reasons why all England should buck up 
financially and make every penny do more 
than its duty. First and foremost was the 
terrific cost of the war that every day took 
its toll of $25,000,000; second was the enor- 
mous increase in imports and the diminished 
flow of exports, a reversal of pre-war con- 
ditions that meant that England each day 
was buying $5,000,000 worth of goods more 
than other countries were purchasing from 
her; third was the human shrinkage due to 
the incessant demand of battlefield and fac- 
tory. Everywhere was colossal expenditure 
of men and money: nowhere existed check 
or restraint. Something had to be done. 

It was generally admitted that the first 
thing for everybody to do was to spend less 
on themselves than in times of peace. When, 
where and how to save became the great 
question. To save money at the cost of 
efficiency for essential and urgent work was 
not true economy. "But," said the thrift 
promoters, "waste is possible even in the 
process of attaining efficiency. For exam- 



124 The War After the War 

pie, people may eat too much as well as too 
little, they may buy more clothes than they 
actually need, ride when they could walk, 
employ a servant when they could do their 
own work, use their motors when they could 
travel in a tram." 

Thus every class came within the range of 
the lightning that was about to strike at the 
root of an ancient evil. 

The start was interesting. Before the 
war was a year old definite order emerged of 
what was at the beginning a scattered pro- 
test against reckless spending. But long 
before the first organised message of sav- 
ing went to the home and purse of the 
worker, the rich began to economise. Here 
is where you encounter the first of the many 
ironies and contrasts that mark this whole 
campaign. The people who could most af- 
ford to be extravagant were the first to draw 
in their horns. This, of course, was not par- 
ticularly surprising because the rich are nat- 
urally thrifty. It is one reason why they 
get and stay rich. 

Among the pioneer organisations was the 
Women's War Economy League founded 
and developed by a group of titled women 



Saving for Victory 125 

who got hundreds of their sisters to pledge 
themselves to give up unnecessary entertain- 
ing, not to employ men servants unless ineli- 
gible for military service, to buy no new 
motor cars and use their old ones for pub- 
lic or charitable work, to buy as few ex- 
pensive articles of clothing as possible, to 
reduce in every way their expenditures on 
imported goods, and to limit the buying of 
everything that came under the category of 
luxuries. Champagne was banned from the 
dinner table, decollete gowns disappeared: 
men substituted black for white waistcoats 
in the evening. 

The rich really needed no organised stim- 
ulus to retrench. The great target for at- 
tack was the mass of the population who did 
not know what it meant to save and who 
required just the sort of constructive les- 
son that an organised thrift movement could 
teach. 

Much of the increase in wages among the 
workers was going for food and drink. 
Hence the opening assault was made on the 
market bill. Fortunately, an agency was al- 
ready in operation. At the outbreak of the 
war a National Food Fund was started to 



126 The War After the War 

feed the hungry Belgians. That work had 
become more or less automatic (the Bel- 
gians' appetite is a pretty regular clock), so 
its machinery was now trained to the twin 
conservation of British stomachs and sav- 
ings. 

"Save the Food of the Nation," was the 
appeal that went forth on every side. "No 
One is too Rich or Poor to Help. Every 
man, woman and child in the country who 
wants to serve the state and help win the 
war can do so by giving thought to the ques- 
tion of conserving food. Since the great 
bulk of our food comes from abroad, it takes 
toll in men, ships and money. Every scrap 
of food wasted means a dead loss to the 
Nation in men, ships and money. If all the 
food that is now being wasted could be saved 
and properly used it would spare more 
money, more ships, more men for the Na- 
tional defence." 

Now began a notable campaign of educa- 
tion which was carried straight into the 
kitchen. Food demonstrators whose work 
ranged from showing the economy of cook- 
ing potatoes in their skins to making fire- 
less cookers out of a soap box and a bundle 



Saving for Victory . 127 

of straw, went up and down the Kingdom 
holding classes. In town halls, schools, vil- 
lage centres and drawing-rooms, mistress 
and maid sat side by side. "Waste noth- 
ing," was the new watchword. 

Backing up the uttered word was a per- 
fect deluge of literature that included "Hand 
Books for House Wives," "Notes on Cook- 
ing," "Hints for Saving Fuel," "Economy 
in Food," in fact, dozens of pamphlets all 
showing how to make one scrap of food or 
a single stick of wood do the work of two. 

The people behind this movement knew 
that with waste of food was the kindred 
waste of money. They realised, too, that 
even the most effective preachment for food 
economy must inevitably be met by the cry, 
"Everybody must eat." With money, on the 
other hand, there seemed a better opportunity 
to drive home a permanent thrift lesson. So 
the forces that had built the bulwark around 
the English stomach now set to work to rear 
a rampart about the English pocketbook. 

Circumstances played into their hand. 
The Great War Loan of $3,000,000,000 had 
just been authorised. "Why not make this 
loan the text of a great National thrift les- 



128 The War After the War 

son and give every working man and woman 
a chance to become a financial partner of 
the Empire," said the saving mentors. " It 
was decided to put part of this loan within 
the range of everybody, that is, to issue it 
in denominations from five shilling scrip 
pieces up, to sell it through the post office 
and thus bring the new savings bank to the 
very doors of the people. 

Again a machine was needed, and once 
more as in the case of the food campaign 
one was well oiled and accessible. It was 
the organisation that had raised, by eloquent 
word and equally stimulating poster and 
pamphlet, the great volunteer army of 3,- 
000,000 men. Just as it had drawn soldiers 
to the fighting colours, so did it now seek 
to lure the savings of the people to the finan- 
cial standard of the nation. 

The Parliamentary Recruiting Committee 
became the Parliamentary War Savings 
Committee and it loosed a campaign of ex- 
ploitation such as England had never seen 
before. From newspapers, bill boards and 
rostrums was hurled the injunction to buy 
the War Loan and help mould the Silver Bul- 
let that would crush the Germans. It was 



Saving for Victory 129 

literally a "popular loan" in that the five 
shilling short-term vouchers, bought at the 
post office, and which paid 5 per cent, could 
be exchanged when they had grown to five 
pounds for a share of long-term War Stock 
paying 4^2 per cent. The higher rate of 
interest was the inducement to begin sav- 
ing and it worked like a charm. 

Tribute to the efficacy of this programme 
is the fact that more than 1,000,000 Eng- 
lish workers purchased the War Loan. 
Through this procedure they learned, what 
most of them did not know before, that 
when you put money out to work it earns 
more money. It meant that they had be- 
come investors and were starting on the 
road to independence. 

But this campaign, admirable as it was in 
scope and execution, failed in its larger pur- 
pose of reaching the great mass of the peo- 
ple. While more than 1,000,000 workers 
participated in the loan their holdings really 
comprised but a small percentage of the im- 
mense total. The bulk of the buying was 
by banks, corporations, trustees, and wealthy 
individuals. The message, therefore, of per- 
manent thrift combined with a more or less 



130 The War After the War 

continuous investment opportunity for every 
man still had to be delivered. All the while 
the Empire hungered for money as well as 
for men. 

Such was the state of affairs when the 
Chancellor of the Exchequer appointed the 
Committee on War Loans for the Small In- 
vestor. It had two definite functions: to 
raise funds for the national defence and to 
provide through the medium selected some 
simple and accessible means for the employ- 
ment of the average man's money. 

This Committee recommended that an is- 
sue be made of Five Per Cent Exchequer 
Bonds in denominations of five, twenty and 
fifty pounds to be sold at all post offices. It 
was an excellent idea and was immediately 
authorised by the Treasury. The Exchequer 
Bond became part of the swelling flood of 
British war securities and might have had 
a distinction all its own but for the enter- 
prise and sagacity of one man who happened 
to be a member of this Committee. 

That man was Sir Hedley Le Bas. You 
must know his story before you can go into 
the part that he played in the great drama 
of British investment that is now to be un- 



Saving for Victory 131 

folded. A generation ago he was the lusti- 
est lad in Jersey, his birthplace. His feats 
as swimmer were the talk of a race inured 
to the hardships of the sea. After seven 
years in the Army he came to London to 
make his fortune. From an humble clerical 
position he rose to be head of one of the 
great book publishing houses in Great Brit- 
ain, employing over 400 salesmen, spend- 
ing over a quarter of a million dollars a 
year in advertising alone. 

Sir Hedley is big of bone, dynamic of 
personality, more like the alert, wideawake 
American business man than almost any 
other individual I have ever met in Eng- 
land. One day he gave the British publish- 
ing business the jolt of its long and dignified 
life by taking a whole page in the Daily Mail 
to advertise a single book. His colleagues 
said it was "unprofessional," that it vio- 
lated all precedent. Sir Hedley thought to 
the contrary and in vindication of his judg- 
ment the book developed into a "best seller." 
That pioneer page in the Mail was the first 
of many. 

Prior to the outbreak of the present war, 
Sir Hedley had been consulted by the then 



132 The War After the War 

Minister of War as to the most advisable 
means of getting recruits. 

"Why don't you advertise ?" he asked. 

"It's never been done before," replied the 
Minister. 

"Then it's high time to begin," said the 
hard-headed Jerseyman. 

His plan scarcely had time to be consid- 
ered when the Great War broke. Sir Hed- 
ley was made a member of the Parliamentary 
Recruiting Committee and with Kitchener 
helped to face England's huge problem of 
raising a volunteer army. How was it to 
be done ? 

Hardly had the new War Chief warmed 
the chair in his office down in Whitehall, 
than Le Bas came to him with this sugges- 
tion: "The quickest way to raise the new 
army is to advertise for men." 

Kitchener's huge bulk straightened: he 
looked surprised: the idea seemed un- 
soldierly, almost unpatriotic. But he knew 
Le Bas. After a moment's hesitancy: 

"All right. Go ahead." 

Under Le Bas was launched the publicity 
campaign which no man who visited Eng- 
land during its progress will ever forget. 



Saving for Victory 133 

This galvanic publisher geared all the Forces 
of Print up to the idea of selling Military 
Service. Instead of books the Merchandise 
was Men. 

The most lureful, colourful and effective 
posters that artist brain could possibly con- 
ceive flashed from every bill board in the 
Kingdom. No one could escape them. 

It was Le Bas who created the phrase 
"Your King and Country Need You" that 
went echoing throughout the Kingdom and 
drew more men to the colours perhaps than 
any other plea of the war. 

When the Parliamentary Recruiting Com- 
mittee became the Parliamentary War Sav- 
ings Committee, Le Bas went with it. Its 
first job was to sell the Great War Loan. 
The Treasury officials wanted it done in the 
usual dignified British way. 

At the first meeting of the Committee, Le 
Bas objected to this procedure. Early the 
next morning he went around to the house 
of Reginald McKenna, Chancellor of the 
Exchequer. 

"The Chancellor is in his bath," said the 
footman who opened the door. 



134 The War After the War 

"Then I'll wait until he can get a robe 
on," said Le Bas. 

Fifteen minutes later, the man who holds 
the British purse strings sat clad in a dress- 
ing gown and, listened to the suggestion that 
revolutionised British methods of financial 
salesmanship. 

"If we want to sell the War Loan, Mr. 
Chancellor," said Sir Hedley, "we will have 
to advertise in a big way. It's a business 
proposition and we must adopt business 
methods." 

"It sounds interesting," said the Chancel- 
lor. "Come to my office at ten and we will 
talk it over." 

It was then 8 130 o'clock. By the time he 
met the Chancellor at the Treasury he had 
dictated the whole outline of the advertising 
campaign. The scheme was adopted: the 
Government spent fifty thousand pounds ad- 
vertising the loan but it sold every penny 
of it. 

This then was the type of man who had 
sat in the six meetings of War Loan for 
Small Investors and listened to many con- 
ventional suggestions. He instinctively 
knew that the Five Pound Exchequer Bond 



Saving for Victory 135 

was not a sufficient bait to hook the small 
savings of the great mass of the people. 

"We've- got to make some kind of at- 
tractive offer," said Sir Hedley to himself. 
"In fact, we must give the investor some- 
thing for nothing to make him lend his money 
to the country. A pound note looks big to 
the average Englishman. Why not give 
him a pound for every fifteen shillings and 
sixpence that he will lay aside for the use 
of the Nation? In other words, why not 
make patriotism profitable?" 

When he laid this plan before the Com- 
mittee, it was unanimously approved. The 
maxim of "Fifteen and Six for a Pound" 
was now unfurled to the breezes and the 
super-campaign to corral the British penny 
was on, under the auspices of the National 
War Savings Committee which now super- 
seded all other organisations as the head and 
front of the National Thrift idea. 

Although he had a strong selling appeal 
in the fact that he was giving the small 
British investor something for nothing, Sir 
Hedley realised that his first bid for sav- 
ings must have the real punch of war in it. 
What was it to be? 



136 The War After the War 

He thought a moment and then went over 
to the War Office where Lloyd George had 
just succeeded the lamented Kitchener. 

"What could a man buy for fifteen and 
six?" he asked the many-sided little Welsh- 
man who was progressively filling every im- 
portant job in the Empire. 

"He could buy six trench bombs," was 
the reply. 

"What else?" queried the publisher. 

"He could get 124 cartridges or — ! — " 

"That's enough !" exclaimed Le Bas. "I've 
got it!" 

Lloyd George looked a little startled, 
whereupon his visitor remarked : "You have 
given me just the thing I wanted. Wait un- 
til to-morrow and you will find out what 
it is." 

The very next day Lloyd George and a 
great part of the whole British Nation knew 
exactly what Sir Hedley got out of his inter- 
view with the War Minister, because the 
first advertisement announcing the new type 
of War Loan read like this : 



Saving for Victory 137 

"ONE HUNDRED AND TWENTY- 
FOUR CARTRIDGES FOR FIF- 
TEEN AND SIX, AND YOUR MON- 
EY BACK WITH COMPOUND IN- 
TEREST 

"Do you know that every 15/6 you put into 
War Savings Certificates can purchase 
124 rifle cartridges? 

"How many Cartridges will you provide for 
our men at the Front? 

"For every 15/6 you put into War Savings 
Certificates now you will receive £1 in 
five years' time. This is equal to com- 
pound interest at the rate of 5.47 per cent. 

"Each year your money grows as follows: 

In 1 year it becomes 15/9 

In 2 years it becomes 16/9 

In 3 years it becomes 17/9 

In 4 years it becomes 18/9 

In 5 years it becomes £1 

"If you need it you can withdraw your 
money at any time, together with any 
interest that has accrued." 

This advertisement made a good many 
people sit up because it brought home for 



138 The War After the War 

the first time one concrete use of the money 
absorbed in war loans. 

The National War Savings Committee 
had two things to sell. One was the Five 
Per Cent Exchequer Bond: the other was 
the new Fifteen and Six War Savings Cer- 
tificate. The promoters were quick to see 
that while the Exchequer Bond was very de- 
sirable, the principal effort must be concen- 
trated on the War Savings Certificate for 
which the widest appeal and the best selling 
talk could be made. 

That it was a good "buy" nobody could 
deny. It was the obligation of the British 
Government : it was free from Income Tax : 
it could be cashed in at any time at a profit : 
and it made the owner part and parcel of 
the financing of the war. Every post office 
and nearly every bank became a selling 
agent. In short, it was a simple, cheap and 
worth-while investment absolutely within the 
scope of every one. 

At the outset the sale was restricted to 
those whose income did not exceed $1,500, 
the purpose being to keep the investment 
among the wage earners. So many muni- 
tion workers were receiving such large in- 



Saving for Victory 139 

comes that this ban was removed. The only 
limitation imposed was that no individual 
could hold more than 500 Certificates. This 
did not prevent the various members of a 
family, for example, from each acquiring the 
full limit. 

Having decided to make the War Savings 
Certificate its prize commodity, the Com- 
mittee proceeded to launch a spectacular, 
even sensational promotion campaign. J. 
Rufus Wallingford in his palmiest days was 
never more persuasive than the literature 
which now fairly flooded Great Britain. 

The phrase "Your King and Country 
Need You" that had stirred the recruiting 
fever now had a full mate in the slogan 
"Saving for Victory" which began to loosen 
pounds and pence from their hiding places. 
The injunction that went forth everywhere 
was 

"WORK HARD: SPEND LITTLE: 
SAVE MUCH" 

From every bill board and every news- 
paper were emblazoned: 



140 The War After the War 

"SIX REASONS WHY YOU SHOULD 
SAVE" 

Here are the reasons: 

1. Because when you save you help 

our soldiers and sailors to win the 
war. 

2. Because when you spend on things you do 

not need you help the Germans. 

3. Because when you spend you make other 

people work for you, and the work of 
every one is wanted now to help our 
fighting men, or to produce necessaries, 
or to make goods for export. 

4. Because by going without things and con- 

fining your spending to necessaries you 
relieve the strain on our ships and docks 
and railways and make transport 
cheaper and quicker. 

5. Because when you spend you make things 

dearer for every one, especially for 
those who are poorer than you. 

6. Because every shilling saved helps twice, 

first when you don't spend it and again 
when you lend it to the Nation. 



Saving for Victory . 141 

The word "Save" which had dropped out 
of the British vocabulary suddenly came 
back. It was dramatised in every possible 
way and it became part of a new gospel that 
vied with the war spirit itself. 

The National War Savings Committee 
became a centre of activity whose long arms 
reached to every point of the Kingdom. 
Branch organisations were perfected in 
every village, town and county: the Ad- 
miralty and the War Office were enlisted: 
through the Board of Education every school 
teacher became an advance agent of thrift: 
the Church preached economy with the Scrip- 
ture : in a word, no agency was overlooked. 

The sale of Certificates started off fairly 
well. On the first day more than 2,000 were 
sold and the number steadily increased. But 
while many individuals rallied to the cause, 
there was not sufficient team work. 

One serious obstacle stood in the way. 
While fifteen shillings and a sixpence is a 
comparatively small sum to a man who makes 
a good income, it looms large to the wage 
earner, especially when it has to be "put by" 
and then goes out of sight for four or five 
years. So the National War Savings Com- 



142 The War After the War 

mittee set about establishing some means by 
which the average man or woman could start 
his or her investment with a sixpence, that 
is, twelve cents. Even here there was a 
difficulty. Millions of people in England 
could save a sixpence a week, but the chances 
are that before they piled up the necessary 
fifteen and six to buy the first Certificate 
they would succumb to temptation and 
spend it. 

The English small investor, like his 
brother nearly everywhere, is a person who 
needs a good deal of urging or the power 
of immediate example about him. There- 
upon the Committee said : "What seems im- 
possible for the individual, may be possible 
for a group." 

Thus was born the idea of the War Sav- 
ings Association, planned to enable a group 
of people to get together for collective sav- 
ing and co-operative investment. This 
proved to be one of the master strokes of 
the campaign. From the moment these As- 
sociations sprang into existence, the whole 
War Savings Certificates project began to 
boom and it has boomed ever since. 

War Savings Associations are groups of 



Saving for Victory 143 

people who may be clerks in the same of- 
fice, shop assistants in the same establish- 
ments, workers in the same factory or ware- 
house, people attending the same place of 
worship, residents in any well-defined lo- 
cality such as a village or ward of a town, 
members of a club, the servants in a house- 
hold: in short, any number of people who 
are willing to work together. Some have 
been started with 10 members, others with 
as many as 500. Up to the first of January 
nearly 10,000 of these Associations had been 
formed throughout the Kingdom. 

Now came the inspiration that was little 
short of genius for it enabled the lowliest 
worker who could only set aside a sixpence 
a week to become an intimate part of the 
great British Saving and Investment 
Scheme. The idea was this : 

If one man saves sixpence a week, it would 
take him thirty-one weeks to get a One 
Pound War Certificate. But if thirty-one 
people each save sixpence a week, they can 
buy a Certificate at once and keep on buying 
one every week. Thus their savings begin 
to earn interest immediately. Thus every 
War Savings Association became a co- 



144 The War After the War 

operative saving and investment syndicate 
— a pool of profit. 

How are the Certificates distributed? The 
usual procedure is to draw lots. In a small 
Association no member is ordinarily per- 
mitted to win more than one Certificate in 
a period of thirty-one weeks, except by spe- 
cial arrangement. Each Association, how- 
ever, can make its own allotment rules. The 
value of winning a Certificate the first week 
is that the winner's 15/6 will have grown to 
one pound in four years and a half instead 
of five. This is broadly the financial advan- 
tage gained by being a member of an Asso- 
ciation, although the larger reason is that 
it is more or less compulsory as well as co- 
operative saving. 

Britain is buzzing with these War Savings 
Associations. You find them in the mobili- 
sation camps, on the training ships, on the 
grim grey fighters of the Grand Fleet, even 
in the trenches up against the battle line. 
The London telephone girls have their own 
organisation: sales forces of large commer- 
cial houses are grouped in thrift units: there 
are saving battalions in most of the muni- 
tion works, and so it goes. In many of the 



Saving for Victory 145 

big mercantile establishments that have As- 
sociations, the weekly drawings of Certifi- 
cates with all their elements of chance and 
profits are exciting events. 

Many Britishers shy at co-operation. For 
example, they like to save "on their own." 
To meet this desire, the War Savings Com- 
mittee devised an individual saving and in- 
vestment plan which begins with a penny, 
that is two cents. Any person can go to 
the Treasurer of a War Savings Associa- 
tion and get a blank stamp book. Each 
penny that he deposits is marked with a lead 
pencil cross in a blank square. When six 
of these marks are recorded, a sixpenny 
stamp is pasted on the blank space. As soon 
as the book contains thirty-one stamps it is 
exchanged for a War Savings Certificate. 

Still another plan has been devised to meet 
requirements of people who do not care to 
affiliate with the War Savings Associations. 
Any post office will issue a stamp book in 
which ordinary sixpenny postage stamps 
can be pasted. When thirty-one have been 
affixed they may be exchanged at the post 
office for a pound Savings Certificate. These 
books have this striking inscription on their 



146 The War After the War 

cover: "Save your Silver and it will turn 
into Gold ! 15/6 now means a sovereign five 
years hence." 

The whole Savings Campaign is studded 
with picturesque little lessons in thrift. The 
London costers — the pearl-buttoned men 
who drive the little donkey carts — subscribed 
to $1,000 worth of Certificates in a single 
week, although they had made a previous in- 
vestment of $4,000. 

In hundreds of factories the idea has 
taken root. In some of them War Savings 
subscriptions are obtained by means of de- 
ductions from wages. Employees can sign 
an authorisation for a certain amount to 
be taken each week or month out of their 
wages. They get accustomed to having two, 
three, four or five shillings lifted out of their 
wages and thus their saving becomes auto- 
matic. 

Often the employer helps the movement 
by contributing either the first or last six- 
pence of each Certificate or offering Cer- 
tificates as bonuses for good conduct or extra 
work. When one small employer that I 
heard of pays his men their War Bonus, he 
gets them, if they are willing, to place two 



Saving for Victory 147 

sixpenny stamps on a stamp card, for which 
he deducts tenpence. The employees are 
thus given twopence for every shilling they 
save. When these cards bear stamps up to 
the value of 15/6 they are exchanged for 
War Savings Certificates. 

No field has been more fruitful than the 
public schools where the thrift seed has been 
planted early. In hundreds of public edu- 
cational institutions Savings Clubs have 
been formed to buy Certificates. In Hunt- 
ingdonshire, where there were less than 150 
pupils, more than $35.00 was subscribed in 
a single morning. At Grimsby a successful 
trawler owner gave $5,000 to the local teach- 
ers' association to help the War Savings 
crusade. A shilling has been placed to the 
credit of every child who undertakes to save 
up for a War Savings Certificate, the child's 
payments being made in any sum from a 
penny up. Ninety-five per cent of the chil- 
dren in the town have begun to save. Sim- 
ilarly, a councillor of Colwyn Bay has of- 
fered to pay one shilling on each Certificate 
bought by the scholars of one of the town's 
schools, and also offered to add fifty per cent 
to all sums paid into the school savings bank 



148 The War After the War 

during one particular week, provided that 
the money was used to purchase War Sav- 
ings Certificates. 

Almost countless schemes have been de- 
vised to instil, encourage and develop the 
thrift idea. In certain districts, patriotic 
women make house to house canvasses to 
collect the instalments for the Certificates. 
They become living Thrift Reminders. Ten- 
ants of model flats and dwelling houses pay 
weekly or monthly War Savings Certificates 
at the same time they pay their rent. 

That this economy and savings idea has 
gone home to high and low was proved by 
an incident that happened while I was in 
London. A man appeared before a certain 
well-known judge to ask for payment out 
of a sum of money that stood to his credit 
for compensation to "buy clothes." The 
judge reprimanded him sharply, saying, 
"Are you not aware that one of the principal 
War Don'ts is, 'Don't buy clothes : wear your 
old ones.' " With this he held up his own 
sleeve which showed considerable signs of 
wear. Then he added : "If I can afford to 
wear old garments, you can. Your applica- 
tion is dismissed." 



Saving for Victory 149. 

With saving has come a spirit of sacri- 
fice as this incident shows : A London house- 
hold comprising father, mother and two chil- 
dren moved into a smaller house, thus sav- 
ing fifty dollars a year. By becoming tee- 
totalers they saved another five shillings 
(one dollar and a quarter) and on clothes 
the same weekly sum. They took no holi- 
day this summer : ate meat only three times 
a week, abstained from sugar in their tea, 
cut down short tramway rides, and the 
father reduced his smoking allowance. By 
these means they have been able to buy a 
War Savings Certificate every week. 

Just as no sum has been too small to save, 
so is no act too trivial to achieve some kind 
of conservation. People are urged to carry 
home their bundles from shops. This means 
saving time and labour in delivery and per- 
mits the automobile or wagon to be used 
in more important work. I could cite many 
other instances of this kind. 

Even the children think and write in terms 
of economy. At the annual meeting of the 
British Association for the Advancement of 
Science held last summer at Newcastle, an 
eminent doctor read a paper on "London 



150 The War After the War 

Children's Ideas of How to Help the War." 
The replies to his questions, which were sent 
to more than a thousand families, all indi- 
cated that the juvenile mind was thoroughly- 
soaked with the savings idea. Some of the 
answers that he quoted were very humorous. 
A boy in Kensington gave the following rea- 
sons: 

"Eat less and the soldiers get more: If 
you make a silly mistake in your arithmetic 
tell your mother not to let you have any jam, 
and put the money saved in the War Loan : 
Stop climbing lamp-posts and save your 
clothes: Don't wear out your boots by 
striking sparks on the kerbstones: If you 
buy a pair of boots you are a traitor to your 
country, because the man who makes them 
may keep a soldier waiting for his: Don't 
use so much soap : Don't buy German-made 
toys." 

The net result of this mobilisation of the 
forces of thrift is that up to January the 
first 50,000,000 War Certificates had been 
sold, representing an investment of nearly 
40,000,000 pounds or approximately $200,- 
000,000. The striking feature about this 
large sum is that it was reared with the cop- 



Saving for Victory 151 

pers of working men and women. "Serve by- 
Saving" in England has become more than a 
phrase, 

All this was not achieved, however, with- 
out the most persistent publicity. England 
to-day is almost one continuous bill board. 
The hoardings which blazed with the appeal 
for recruits and the War Loan now proclaim 
in word and picture the virtues of saving 
and the value of the now familiar War Cer- 
tificates. Likewise they embody a spectacu- 
lar lesson in thrift for everybody. 

One of the most effective posters is headed 
"ARE YOU HELPING THE GER- 
MANS?" Under this caption is the sub- 
scription : 

"You are helping the Germans when you 
use a motor car for pleasure : when you buy 
extravagant clothes : when you employ more 
servants than you need: when you waste 
coal, electric light or gas : when you eat and 
drink more than is necessary to your health 
and efficiency. 

"Set the right example, free labour for 
more useful purposes, save money and lend 
it to the Nation and so help your Country." 

A gruesome, but none the less striking, 



152 The War After the War 

poster is entitled: "What is the Price of 
Your Arms?" 

Then comes the following dialogue: 
Civilian: "How did you lose your arm, 
my lad?" 

Soldier: "Fighting for you, sir." 
Civilian: "I'm grateful to you, my lad." 
Soldier: "How much are you grateful, 
sir?" 

Civilian: "What do you mean?" 
Soldier: "How much money have you 
lent your Country?" 

Civilian : "What has that to do with it?" 
Soldier: "A lot. How much is one of 
your arms worth?" 

Civilian: "I'd pay anything rather than 
lose an arm." 

Soldier: "Very well. Put the price of 
your arm, or as much as you can afford, 
into Exchequer Bonds or War Savings Cer- 
tificates, and lend your money to your Coun- 
try." 

Still another is entitled "BAD FORM IN 
DRESS" and reads: 

"The National Organising Committee for 
War Savings appeals against extravagance 
in women's dress. 



Saving for Victory 153 

"Many women have already recognised 
that elaboration and variety in dress are 
bad form in the present crisis, but there is 
still a large section of the community, both 
amongst the rich and amongst the less well 
to do, who appear to make little or no dif- 
ference in their habits. 

"New clothes should only be bought when 
absolutely necessary and these should be 
durable and suitable for all occasions. Lux- 
urious forms, for example, of hats, boots, 
shoes, stockings, gloves, and veils should be 
avoided. 

"It is essential, not only that money should 
be saved, but that labour employed in the 
clothing trades should be set free." 

Harnessed to the Saving and Investment 
Campaign is a definite and organised crusade 
against drink, ancient curse of the British 
worker, male and female. It is really part 
of the movement instituted by the Govern- 
ment at the beginning of the war to curtail 
liquor consumption. One phase is devoted 
to Anti-Treating, which makes it impossible 
to buy any one a drink in England. This 
was followed by a drastic restriction of 
drinking hours in all public places where 



154 The War After the War 

__^_____ 

alcohol is served. Liquors may only be ob- 
tained now between the hours of 12 noon and 
2:30 in the afternoon and from 6 to 9:30 
at night. As a matter of fact, the only tip- 
ple that you can get at supper after the play, 
even in the smartest London hotels, is a fruit 
cup, which is a highly sterilised concoction. 

The War Savings Committee has borne 
down hard on the drinking evil and Eng- 
land's enormous yearly outlay for liquor — 
nearly a billion dollars — is used as a telling 
argument for thrift. A poster and a 
pamphlet that you see on all sides is headed, 
"THE NATION'S DRINK BILL," and 
reads : 

"The National War Savings Committee 
calls attention to the fact that the sum now 
being spent by the Nation on alcoholic liquors 
is estimated at 

£182,000,000 a year. 

"And appeals earnestly for an immediate 
and substantial reduction of this expendi- 
ture in view of the urgent and increasing 
need for economy in all departments of the 
Nation's life. 

"Obviously, in the present national emer- 



Saving for Victory 155 

gency a daily expenditure of practically 
£500,000 on spirits, wine and beer can- 
not be justified on the ground of necessity. 
This expenditure, therefore, like every other 
form and degree of expenditure beyond what 
is required to maintain health and efficiency 
is directly injurious to national interests. 

"Much of the money spent on alcohol 
could be saved. Even more important would 
be ( 1 ) the saving for more useful purposes 
of large quantities of barley, rice, maize and 
sugar; and (2) the setting free of much 
labour urgently needed to meet the require- 
ments of the Navy and the Army. 

"To do without everything not essential 
to health and efficiency while the war lasts 
is the truest patriotism." 

Under the silent but none the less con- 
vincing plea of these posters, backed up by. 
millions of leaflets and booklets explaining 
every phase of the Savings Campaign, the 
sale of Certificates rose steadily. From 
906,000 in May they jumped to nearly 3,- 
000,000 in June. But this was not enough. 
"Let us make one big smash and see what 
happens," said the Committee. Thereupon 
came the idea for a War Savings Week, 



156 The War After the War 

which was to be a notable rallying of all 
the Forces of Thrift and Saving. 

No grand assault on any of the actual bat- 
tle fronts was worked out with greater care 
or more elaborate attention to detail than 
this Savings Drive. No loophole to register 
was overlooked. It was planned to begin 
the work on Sunday, July 16th. 

First of all, the resources of the Church 
were mobilised. A Thrift sermon was 
preached that Sunday morning in nearly 
every religious edifice in the Kingdom. Fol- 
lowing its rule to leave nothing to chance, 
the War Savings Committee prepared a spe- 
cial book of notes and texts for sermons 
which was sent to Minister, Leaders of 
Brotherhoods and Men's Societies. Texts 
were suggested and ready-made and ready 
to deliver sermons were included. One ojc 
these sermons was called "The Honour of 
the Willing Gift," another was entitled "The 
Nation and Its Conflict," and its peculiarly 
appropriate text was "Well is it with the 
man that dealeth graciously and lendeth." 

A special address (in words of one syl- 
lable) to the children of England embody- 
ing the virtues of penny saving and show- 



Saving for Victory 157 

ing how these pennies could be made to work 
and earn more pennies, as shown in the con- 
crete example of a War Savings Certificate, 
was read by thousands of Sunday school 
teachers to their classes throughout the na- 
tion. 

Nearly every human being in Great 
Britain got the Message of Thrift that week. 
Boy Scouts and Girl Guides went from house 
to house bearing copies of the various kinds 
of instructive literature that had been pre- 
pared for the campaign. Typical of the 
thoroughness of the detail is the fact that 
in Wales all this material was printed in 
the Welsh language. The only country 
where no special efforts were made was Scot- 
land, where to preach thrift is little less than 
an insult. 

For seven days and nights the almost in- 
cessant onslaught was kept up. When the 
smoke cleared and the count was taken, it 
was found that 3,000,000 Certificates had 
been sold during the week while the total 
for the month was 10,700,000. 

So vividly was the phrase "War Savings 
Week" driven home that the War Savings 
Committee decided instantly to capitalise 



158 The War After the War 

this new asset. In a few days hundreds of 
bill boards and fences throughout the King- 
dom blossomed forth with this sentence, 
painted in red, white and blue letters: 
"Make Every Week National War Savings 
Week." 

Not content with splashing the bill boards 
with the injunction to save, the National 
Committee hit upon what came to be the 
most popular medium for disseminating the 
Gospel of Thrift. It enlisted the movies. A 
film called "For the Empire" was made by 
a number of well known motion picture ac- 
tors and actresses who gave their services 
free of charge. 

It was a moving and graphic story of the 
war showing how a certain English lad vol- 
unteers at the outset and goes to the front. 
You get a vivid picture of life in the trenches 
shown in actual war scenes. Then you see 
the young soldier fall while gallantly leading 
a charge : his body is brought home and he 
is buried with military honours. Then the 
screens hurls the question at the audience: 
"This man has died for his Country. What 
are you doing for the Nation in its hour of 
trial ?" Now follows a vivid lesson in how 



Saving for Victory 159 

to save and buy a War Savings Certificate. 
This film has been shown in 2500 cinema 
theatres up to the first of the year and was 
booked to be shown in 1000 more within the 
next few months. 

So widespread has the Thrift movement 
become that the War Savings Committee 
now publishes its own monthly magazine 
called War Savings. The first issue ap- 
peared on September first and included such 
timely articles as "The Might of a Mite," 
a lesson in penny building: "The Final 
Mobilisation," which showed how the last 
£100,000,000 would win the war: a third 
article explained the Economy Exhibition 
now being held all over Great Britain as 
part of the Thrift crusade. There was also 
an article on the War Saving movement by 
Reginald McKenna, Chancellor of the Ex- 
chequer, and a very illuminating appeal, 
"Every Household Must Help Win the 
War." 

This leads to one of the most instructive 
branches of the whole campaign, the one de- 
voted to the elimination of waste in the 
household. Under the direction of the Patri- 
otic Food League a voluminous and helpful 



160 The War After the War 

literature has been prepared and distributed. 
One booklet devoted to "Waste in the Well- 
to-do Household" shows how gas, coal and 
electric light bills, and the whole cost of liv- 
ing can be reduced. Another called "House- 
hold Economies" has helpful hints for mis- 
tress and maid : a third is "The Best Foods 
in War-Time. " A stirring plea was made to 
every household in the shape of a card sur- 
mounted by a picture of Lord Kitchener and 
containing his famous warning to the Eng- 
lish people: "Either the civilian popula- 
tion must go short of many things to which 
it is accustomed in times of peace, or our 
armies must go short of munitions and other 
things indispensable to them." Below this 
quotation was the stirring question: 

"Which is it to be : economy in the house- 
hold or shortage in the Army and Navy ?" 

Under the title of "War Savings in the 
Home" a plan of campaign has been sent to 
every household in England for operation 
during the whole period of war. Among 
other things it urges every family to give 
up meat for at least one day in the week, 
and in any case to use it only once a day. 
Margarine is recommended instead of but- 



Saving for Victory 161 

ter. Home baking is strenuously suggested. 
It is shown how reduction in personal and 
household expenditure can be effected, for 
example, in the laundry by using curtains 
and linen that can be washed in the house. 
A special appeal to dispense with starched 
and ornamental lingerie is made. In these 
and many other ways the style of living is 
simplified so that the amount of domestic 
service in every home is greatly cut down 
and much labour set free for war work and 
general production. 

Indeed, no phase of Life or Work has 
escaped the Search-Light of the benevolent 
Inquisition which has wrought Conservation 
out of Waste. 

It has a larger significance than merely 
changing habits and converting pounds and 
pence into guns and shells. It means that 
England is creating a Sovereignty of Small 
Investors, thus setting up the safeguard that 
is the salvation of any land. The War Sav- 
ings Certificate will have a successor in the 
shape of a more permanent but equally stable 
Government bond. 

When all is said and done you find that 
huge reservoirs of Savings at work form 



162 The War After the War 

a country's real bulwark. Through invest- 
ment in small, accessible, and marketable se- 
curities a people become independent and 
therefore more efficient and productive. It 
mobilises money. 

Behind all the spectacular publicity that 
has swept hundreds of millions of British 
shillings into safe and profitable employment 
is a Lesson of Preparedness that America 
may well heed. It means a form of Na- 
tional Service that is just as vital to the gen- 
eral welfare as physical training for actual 
conflict. A nation trained to save is a na- 
tion equipped to meet the shock of economic 
crisis which is more potent than the attack 
of armed forces. 

What does it all mean? Simply this: 
no man can touch the English thrift cam- 
paign without seeing in it another evidence 
of a great nation's grim determination to 
win, whatever the sacrifice. 

The British people at home have come to 
realise that by personal economy and denial 
they can serve their country and their cause 
just as effectively as those who fight amid 
the blare of battle abroad. They are ani- 
mated by a New Patriotism that is both prac- 



Saving for Victory 163 

tical and self-effacing. It is giving the Eng- 
lishman generally a higher sense of public 
devotion : it is making him a better and more 
productive human unit: it is equipping the 
nation to meet the drastic economic ordeal 
of to-morrow. 

If this lesson of conservation is heeded 
after the war and becomes a feature of the 
permanent British life, then the Great Con- 
flict will almost have been worth its dreadful 
cost in blood and treasure. He who saves 
now will not have saved in vain. 



VI — The Price of Glory 



WHEN John Jones of the U. S. A. 
puts his thousand dollars into 
an English, French, Russian or 
German bond he becomes part 
and parcel of the mightiest financial struc- 
ture ever dedicated to a single purpose. He 
cannot tell how his funds will be used. They 
may buy a few hundred shells, clothe a thou- 
sand soldiers, feed a battalion or build a 
trench. All he knows is that his mite joins 
the continuous and colossal stream of ex- 
pense that makes up the Red Wage of War. 
Now if John Jones employs his money in 
the stock or bond of a railroad, corporation, 
or public utility enterprise he can find out 
almost precisely what it does, for it lays 
down a track, provides new equipment or 
builds a power house. The investment, in 
short, represents something that produces 
more wealth. 

War, on the other hand, is a gigantic en- 
gine of destruction. Instead of building up, 
it tears down. It is a monster machine con- 
164 



The Price of Glory 165 

secrated to waste. The only possible divi- 
dend can be peace. 

The cost of the European conflict has a 
deeper interest for us than mere curiosity 
over staggering statistics. The reason is 
that we have joined the Paymaster's Corps. 
In other words, we have backed up our sym- 
pathy with cash. We are silent partners in 
the costliest and deadliest of all businesses. 

Up to the present stupendous struggle and 
with the exception of the Russo-Japanese 
War in which we floated several issues for 
the little yellow men, we have had no defi- 
nite economic part in the wars that shook 
other nations. The losses in money and in 
men fell on the combatants. 

This war, which has shattered so many 
precedents, has drawn the United States out 
of its one-time aloofness. To the dignity of 
World Trader we have added the twin dis- 
tinction of World Banker. Already we have 
poured out practically two billions of dol- 
lars for securities and credits of the warring 
countries. To this must be added an even 
greater sum representing our enormous war 
exports. The price, therefore, of whatever 
freedom emerges from these years of blood- 



166 The War After the War 

shed intimately touches thousands of Ameri- 
can pocketbooks in one way or another. 

What is the final toll that Battle will take : 
more important than this, what is the future 
of the treasure that we have laid on its Con- 
suming Altar? 

Before making any analysis of the Ameri- 
can stake in the cost of the European War, 
it is important to find out first just how 
much money has been expended and what 
the likelihood of future outlay will be. 
Like every other phase of the stupendous 
upheaval this one is both speculative and 
problematical. 

To deal with these European War figures 
is to flirt with Titanic Numerals. They are 
more the Playthings of the Gods than mat- 
ters for mere mortals to juggle with. 

Up to the first of January, 191 7, the total 
military expenses of both sides had reached 
approximately $61,000,000,000. It is only 
when you reduce this enormous sum to 
terms that every man and woman can under- 
stand that you begin to get some idea of the 
amazing cost of conflict. 

The amount of money expended for direct 
war purposes alone since August 1, 1914, 



The Price of Glory 167 

is equal to three times the par value capital- 
ization of all the American railroads. It 
represents fifty times the net national debt 
of the United States: eighteen times the 
amount of money in actual circulation in 
this country: and eleven times the total de- 
posits in all our savings banks. With it you 
could build 146 Panama Canals or pay for 
the Napoleonic, Crimean, Russo-Japanese, 
South African and American Civil Wars 
and still have a surplus of $34,000,000,000 
left. Such is the New and High Cost of 
War! 

The price of glory is being constantly ad- 
vanced. The expenditures for the first year 
of the war were $17,500,000,000: for the 
second they had increased to $28,000,000,- 
000 : the estimate for the third year, to end 
August 1, 19 1 7, at the present rate of spend- 
ing is about $33,000,000,000. This means 
that by the time the next harvest moon 
shines ( and no man in Europe to-day doubts 
that it will gleam on carnage), the war will 
have represented a sacrifice for military 
purposes alone of $78,500,000,000. 

Taking the daily cost of the war you find 
that England is $25,000,000 poorer for 



168 The War After the War 

every twenty- four hours that pass: that 
France must check out $20,000,000: Russia 
$16,000,000: Italy $5,000,000. Little Rou- 
mania is cutting her war expenditure teeth 
at the rate of $1,000,000 per diem. 

Cross the frontier (for war expense is 
no respecter of cause or creed), and Ger- 
many is "discovered," as they say in play- 
books, spending $17,500,000 every day: 
Austria, Turkey and Bulgaria, $11,000,000. 
Thus between sunrises that break over these 
warring hosts very nearly $100,000,000 has 
gone up in smoke, splinters or ruin of some 
kind, or the upkeep of fighting. 

Since England's cost each day is heavier 
than any of the other countries at war, due 
to the fact that she is Financial First Aid to 
most of her Allies and is maintaining a fleet 
almost equal to all the others combined, let 
us reduce her enormous daily war bill of 
$25,000,000 to simpler form. It means that 
participation in the greatest of all wars is 
costing her $1,410,666 an hour, $17,361 a 
minute and a little over $289 a second. At 
this rate of waste John D. Rockefeller 
would be bankrupt in forty days; Andrew 
Carnegie would be in the bread line in ten. 



The Price of Glory 169 

The sum is greater than the entire net pub- 
lic debt of Chicago; it equals the assessed 
valuation of all the taxable property in 
Poughkeepsie, New York. 

Work out this immense daily outlay from 
still another angle and these striking facts 
develop : the war is costing at the rate of 29 
cents a day for every inhabitant of the 
United Kingdom: 31 cents for every indi- 
vidual in France : 22 cents for every person 
in the Kaiser's domain, and 6 cents for each 
human unit in the Russian Empire. 

Yet this well-nigh overwhelming rush of 
figures only accounts for the actual cost of 
hostilities. By this I mean arms and arma- 
ment, food and military supplies, the con- 
struction, maintenance and renewal of fleets, 
the cost of transport and the pay of soldiers 
and sailors. 

To the vast sum already recorded must 
be added the loss registered by the destruc- 
tion of cities, towns and villages, the sink- 
ing of ships, the wiping out of factories, 
warehouses, bridges, roads and railways. 

Then, too, you must allow for the almost 
incalculable productive loss due to the kill- 
ing and maiming of millions of men: the 



170 The War After the War 

shrinkage of agricultural yields and the 
more or less general dislocation of the ma- 
chinery of output. All these factors pile up 
a total, the calculation of which would 
almost cause a compound fracture of the 
brain. Sufficient to say it puts a terrific hu- 
man and financial tax on coming genera- 
tions and we in America will feel its effects 
when the world begins to readjust itself to 
the altered social and economic conditions 
which will come with peace. 

Of course the inevitable question arises: 
Who is paying the Scarlet Piper? In seek- 
ing the answer you encounter for the first 
time America's intimate and all-important 
part in the costly drama now being unfolded 
to the tune of billions. She sits in the ar- 
moured box-office with the Treasurers of the 
embattled nations. 

At the outset of the war all the belligerent 
countries believed that they could finance 
their needs without seeking neutral aid. 
Less than a year was enough to dispel this 
delusion. Although England and France 
immediately voted immense credits they 
were not long in finding out that they must 
back up their unprecedented mobilisation of 



The Price of Glory 171 

resources with outside help. They came to 
us. 

When the great Anglo-French loan of 
$500,000,000 was first discussed as a pos- 
sible American financial feat, people over 
here began to wonder why Great Britain 
and France, whose combined wealth ex- 
ceeds that of all the other nations at war, 
should want overseas assistance. Since the 
reason for this loan as well as the disposi- 
tion of proceeds are practically the same as 
that of most of the other Allied issues in 
this country in which thousands of our in- 
vestors have participated, it is well worth 
explaining because it also carries with it a 
lesson in international barter. Here it is: 

Before the war our foreign trade was 
growing fast. England and France, in par- 
ticular, were good customers for our wheat 
and other foodstuffs, iron and cotton manu- 
factures, oil and automobiles. In exchange 
we imported the product of many European 
factories. 

Business relations between nations are 
not settled like transactions between indi- 
viduals and firms, that is, with checks or 
cash. They are settled by balances. Eng- 



172 The War After the War 

land's imports from the United States, for 
example, are paid by her exports to us. Us- 
ually exports and imports so nearly balance 
that the difference is paid by gold or with 
the temporary use of bank credit. There- 
fore it is not a question of actual money but 
of exchange and this foreign exchange is a 
commodity whose value fluctuates with sup- 
ply and demand. 

Along came the war. Millions of arti- 
sans in France and England were with- 
drawn from lathe and loom to fight in the 
battle line. What workers remained at 
their posts had to produce war supplies. Yet 
civilian and soldier needed food, clothing 
and arms. The demand for our products 
increased and the United States suddenly 
became the work-shop and the granary of 
the world. 

The Allies, in control of the seas, became 
our principal foreign customers. American 
exports soared: those of France and Eng- 
land declined correspondingly. A huge bal- 
ance of trade — the biggest in our history — 
swung to our favour. 

This balance of trade had to be settled, 
but on an abnormal basis. What was ordi- 



The Price of Glory 173 

narily a comparatively trivial matter of a 
few millions suddenly became an item of 
many millions and it was all owed on one 
side. The demand for exchange on New 
York greatly exceeded the supply and the 
inevitable dislocation happened. England 
and France had to pay a drastic premium 
on the American dollar. The English 
pound, normally rated $4.86, dropped to 
$4.50; the franc, ordinarily worth 19.29 
cents, fell to 16.94 cents. This shrinkage 
in values was not due to any impairment of 
the resource or wealth of the Allies but be- 
cause the machinery of international pay- 
ment works automatically and unsenti- 
mentally. 

Here was a crisis that without aid from 
us might have eventually cost us dear. 
Rather than submit to the terrific drain on 
the exchange value of the pound and franc, 
England and France could have set about 
emulating the example of Germany and be- 
come self-sufficient. It was not a month's 
work or even a year's work, but ultimately 
it would have made these countries more in- 
dependent of the United States after the 
war is over. 



174 The War After the War 

Of course England and France could 
have met the situation by shipping gold. 
Each had a large reserve but the United 
States had all the gold it wanted, and still 
has. Besides, in such an emergency gold is 
an inert and unproductive commodity. 

Again, the Allies might have "dumped" 
their American securities representing an 
investment of over three billions of dollars, 
which would have upset the American stock 
market and sent prices down. Either one 
of these performances would have done us 
no good. 

It was important, therefore, for the bene- 
fit of all interest involved, that the Allies 
establish a credit in the United States that 
would enable them to buy freely and re- 
move the costly handicap on American ex- 
change. In a word, instead of having to 
pay their bills through an intricate mechan- 
ism that rose and fell with the tides of 
trade and put a premium on trading with 
us, a medium was needed that would re- 
store the whole economic trade balance. It 
was as essential to us as to our customers. 

Hence the Anglo-French Five Hundred 
Million Dollar Loan was floated and Uncle 



The Price of Glory 175 

Sam became a war banker. This loan, how- 
ever, was nothing more or less than the 
setting up of a credit of half a billion dol- 
lars for England and France in the United 
States. To put it in another way, it is just 
as if the two Allies had deposited this 
sum in an American bank and then drew 
checks against it for goods and raw ma- 
terials made or mined in America. In a 
word, we lent to ourselves. 

Put out at a time when money was scarce, 
the loan would have been unpatriotic and 
uneconomic. But our banks were filled with 
idle cash: everywhere capital sought safe 
and profitable employment. Now you begin 
to see why these allied loans are really good 
business in more ways than one. 

What is our financial stake in the cost of 
the war: what does it yield: how is it safe- 
guarded ? 

Clearly to understand this whole situation 
you must know just how these foreign 
bonds are put out. There are two kinds. 
One is the internal loan issued in the money 
of the country whose name it bears. This 
means that if it is a French bond it is in 
terms of francs: if English it calls for pay- 



176 The War After the War 

ment in pounds sterling: if Russian, in rou- 
bles: if German, in marks. An external 
loan, on the other hand, is issued in the 
money of the country in which it is floated. 
The Anglo-French loan is an example of 
this kind because both principal and interest 
are to be paid in United States gold coin. 
These internal and external loans may be 
direct obligations of the issuing govern- 
ments or may be secured by collateral. 

There is still a third medium for the em- 
ployment of American money in the war. 
Technically it is known as bank credit. 
Through this agency, foreign firms make 
deposits of money or collateral in the na- 
tional banks of their respective countries 
and purchase goods in America through 
credits thus established for them in a group 
of New York banks or trust companies. 
The acceptances for the goods thus bought 
become negotiable documents and are bought 
and sold by institutions and investors at a 
discount. 

This evidence of debt is not the kind of 
foreign investment suitable for the man or 
woman with savings to employ because it is 



The Price of Glory 177 

more or less a banking transaction. These 
credits usually net about 6y 2 per cent. 

With the exception of a comparatively 
small amount of German and Austrian 
Bonds bought in the main by natives of 
these two countries for purely sentimental 
and patriotic reasons, the entire bulk of 
European loans placed in America is for 
the Allied countries, principally England 
and France who are our heaviest customers 
in trade. 

The largest foreign loan brought out here 
so far is the Anglo-French 5 per cent Ex- 
ternal Loan which was negotiated through 
J. P. Morgan & Company — Fiscal Agents 
for the Allies over here — by the Commission 
headed by Lord Reading and Sir Edward 
Holden. It is the Joint and Several Obliga- 
tion of the Governments of the United 
Kingdom of Great Britain and Ireland and 
the French Republic, is dated October 15, 
1 91 5, and is due five years after that date. 
It ranks first amongst the foreign war ob- 
ligations of these countries. 

This was the first big credit arranged by 
England or France in the United States and 
the proceeds were used, in the manner that 



178 The War After the War 

I have already described, for the purchase 
of American goods and to stabilize the for- 
eign exchange. These bonds which have 
had a very wide sale in America were 
brought out at 98 and interest and at the 
time of issue represented an investment that 
paid nearly 5^ per cent. 

These bonds, I might add, are convertible 
at the option of the holder on any date not 
later than April 15, 1920, or provided that 
notice is given not later than this date, par 
for par, into 15-25 Year Joint and Several 
4.y 2 per cent bonds of the Governments of 
the United Kingdom of Great Britain and 
Ireland and the French Republic. Such 4^2 
per cent bonds, payable, principal and in- 
terest, in United States gold coin, in New 
York City, and free from deduction for any 
present or future British or French taxes, 
will mature October 15, 1940, but will be 
redeemable, at par and accrued interest, in 
whole or in part, on any interest date not 
earlier than October 15, 1930, upon three 
months' notice. 

The equity behind these bonds is the good 
name, wealth and taxing power of the issu- 
ing countries. The interest on this loan 



The Price of Glory 179 

equals only one-fifth of one per cent of the 
total estimated income of the British people 
in 1 914. It is slightly more than one-third 
of one per cent of the French Republic in 
1914. 

Between this loan and the next large bor- 
rowing by England or France in the United 
States occurred an event of significance to 
the American investor interested in the se- 
curities of foreign nations. The Anglo- 
French loan, as you know, was simply the 
promise to pay of two great countries whose 
Government Bonds at home represented the 
last word in unshakable security. 

But when England and France stepped up 
to our money counters again, Uncle Sam 
put sentiment aside and became a pawn 
broker. "I think you are all right," he 
said, "but you are in a war that may last 
a very long time and I must have collate- 
ral." 

To English pride this was a terrific jolt. 
I happened to be in England at the time 
and I recall the astonishment of no less a 
distinguished individual than the Chancel- 
lor of the British Exchequer. It was un- 
believable that any nation could demand 



180 The War After the War 

greater security than the good name of the 
Empire. "If the elder J. P. Morgan were 
alive this would never have happened," said 
the London bankers. They knew that the 
Grizzled Old Lion of American Finance al- 
ways held that character was the best col- 
lateral. In the war emergency, however, 
many American bankers thought to the con- 
trary and the net result was that with all 
external loans thereafter England and 
France have been forced to dig into their 
strong boxes and do what any individual 
does when he borrows money — put up a 
good margin of security. 

An illustration of this secured obligation 
of the British Government is the issue of 
$300,000,000 Five and a Half Per Cent 
Gold Notes dated November 1, 19 16. Prin- 
cipal and interest are payable without de- 
duction of any English tax in New York 
and in United States gold coin. The holder 
of these notes, however, has the option to 
get his money in London but at a fixed rate 
of $4.86 per pound sterling, the normal 
value of the pound in peace time. Since the 
pound sterling at the time this article is 



The Price of Glory 181 

written is quoted at $4.76, this is a decided 
advantage. 

The new English loan is secured by stocks 
and bonds whose total market value is not 
less than $360,000,000. One group of this 
collateral consists of stocks, bonds and 
other obligations of American corporations 
and the obligation, either as maker or guar- 
antor, of the Government of the Dominion 
of Canada, the Colony of Newfoundland 
and Canadian Provinces and Municipalities. 
The second group included obligations of 
Australia, Union of South Africa, New 
Zealand, Argentina, Chili, Cuba, Japan, 
Egypt, India and a group of English Rail- 
way Companies. I enumerate this collateral 
to show the inroads upon British securities 
that increasing war cost is making. This 
collateral must always show a market value 
margin of twenty per cent above the amount 
of the loan. It means that should there be 
any slump the English Government must 
supply additional security. 

This issue was brought out in two forms. 
Half of the loan is in Three Year Notes due 
November 1, 19 19, which were issued at 
99^4 an d interest and yielding over 5.75 per 



182 The War After the War 

cent: the other half is in Five Year Notes 
due November i, 1921, brought out at 98^ 
and interest and yielding about 5.85 per 
cent. These Notes are redeemable at the 
option of the Government at various interest 
dates between 19 17 and 1920 at prices rang- 
ing from 101 to 105 and interest. 

Having established the precedent of a 
secured loan, all succeeding English issues 
in this country have been backed up with 
ample collateral. These bonds have a ready 
market, an important detail that the invest- 
or must not overlook in purchasing foreign 
securities. 

Now turn to the borrowings of France in 
the United States. With this great nation, 
whose middle name is Thrift, Uncle Sam 
was no respecter of past performance. For 
the one separate French external loan he 
exacted his pound of collateral. As a mat- 
ter of fact it amounted to nearly a ton. 

I refer to the issue of $100,000,000 Three 
Year Five Per Cent Gold Notes bearing the 
date of August 1, 1916. To float this loan 
the American Foreign Securities Company 
was formed which arranged to lend the 
French Government $100,000,000. As se- 



The Price of Glory 183 

curity the Company — it was merely a group 
of American bankers, required France to 
deposit stocks and bonds having a value at 
prevailing market and exchange rate of 
$120,000,000. Should the value of these 
securities fall below this sum they must be 
replenished until there is a margin of twenty 
per cent in excess of the principal of the 
loan. 

These securities throw an interesting side- 
light upon the resource of the French Re- 
public and its ability to borrow desirable 
collateral from patriotic citizens. They in-, 
elude obligations of the Government of Ar- 
gentine, Sweden, Norway, Denmark, Swit- 
zerland, Holland, Uruguay, Egypt, Brazil, 
Spain, and Quebec. The most picturesque 
parcel in the lot is $11,000,000 in Suez 
Canal shares. This stock is one of the cor- 
porate heirlooms of France and is very 
closely held. It not only pays a large divi- 
dend but shares in the profits of the com- 
pany which in peace times are big. The 
fact that France should put these prize se- 
curities in "hock" is evidence of her deter- 
mination to keep her credit absolutely above 
reproach. 



184 The War After the War 

The Three Year French Notes were 
brought out at 98 and interest and at the 
time of issue yielded about 5.73 per cent. 

But all direct French borrowing in Amer- 
ica has not been on the pound of flesh basis. 
For now we come to what might well be 
called The Loan of Sentiment. It is the 
$50,000,000 City of Paris Five Year Six 
Per Cent Gold Bond Issue dated October 
15, 1 91 6. It gave Americans the oppor- 
tunity to pay a substantial tribute of affec- 
tionate gratitude for happy hours spent in 
the Queen City of Europe and have the 
prospect of a desirable dividend at the 
same time. Here is a piece of foreign 
financing with a distinction and a back- 
ground all its own. Aside from its purely 
sentimental phase it is perhaps the only loan 
floated in America since the war which is 
dedicated to construction instead of destruc- 
tion. The proceeds are to be used to reim- 
burse the City of Paris for expenditures in 
building hospitals and making other neces- 
sary humanitarian improvements and to pro- 
vide a sinking fund to meet similar disburse- 
ments. Amid the incessant hate and pas- 



The Price of Glory 185 

sion of war it is pleasant to find this back 
water of cooling relief. 

Like most of the foreign issues made dur- 
ing the war it follows the highly intelligent 
European practice of putting out loans in 
small denominations so as to be within the 
reach of the great mass of the people. 
These bonds may be had in multiples of 
$100 and upward. The Government of 
France has agreed to permit the exportation 
of sufficient gold to permit the payment of 
principal and interest in the yellow metal in 
New York. The loan — the only external 
one of the City of Paris — was brought out 
at 98^4 and interest, which would make an 
investment of 6.30 per cent. In addition to 
this yield as an investment there is the pos- 
sibility of profit in exchange in view of the 
option to collect principal and interest at the 
rate of 5.50 francs per dollar instead of the 
normal rate of exchange before the war. 

This statement of possible exchange 
profits leads us to one of the conspicuous 
features of the latest National French Loan, 
which although internal in form has been 
put within the ken of the American in- 
vestor. 



186 The War After the War 

Fully to comprehend it you must know 
that in ordinary times a dollar in American 
money is worth 5.18 francs. On account of 
the dislocation in foreign exchange the value 
of a dollar in French money has risen to 
approximately 5.85 francs. Therefore when 
you buy a French security in terms of francs 
for American dollars you get a great deal 
more for your money than you would have 
received before the war. Hence the pos- 
sibility of profit when francs return to nor- 
mal is large. 

The National French Loan was sold to 
American investors at an exchange rate 
of 5.90, which means that every dollar 
you employ gives you a principal of 5.90 
francs. On this basis the price for the se- 
curity issued at a par of 100 would be 87^2, 
which would make the direct yield over 5.70 
per cent. Should exchange return to nor- 
mal, the subscription price would be equiva- 
lent to 753/2, which would make the direct 
yield over 6^ per cent. 

Translating this loan into terms of money, 
you find that for every $14.83 you invest 
you get 100 francs capital: for every 
$148.30 you get 1000 francs capital: for 



The Price of Glory 187 

$741.52 you receive 5000 francs capital. If 
French exchange should return to normal 
and the securities sell at the issue price — 
873/2 — the investor would receive $16.89 for 
every 100 francs of capital: $168.88 for 
every 1000 francs: $844.39 f° r every 5000 
francs. On this basis without regard to in- 
come return the holder of 5000 francs capi- 
tal would receive a profit of $103.94 or over 
13.75 per cent on his investment. 

Should the market price of the issue ad- 
vance to 100 and exchange return to normal 
the investor would get $19.30 for every 100 
francs capital; $193.00 for every 1000 
francs capital; $965.00 for every 5000 
francs capital. In this case and again with- 
out regard to income return, the holder of 
5000 francs capital would receive a net 
profit of $223.50 or approximately 30 per 
cent. 

This loan is issued in Rentes and in de- 
nominations of 100 francs and multiples. 
Rentes is the form in which all French 
Government issues are brought out at home. 
The word means interest or income. The 
French always refer to their Government 
Bonds in terms of interest without any men- 



188 The War After the War 

tion of principal. This is because rentes 
are supposed to be perpetual. The new 
French loan just explained is not redeemable 
or convertible before 193 1. 

Usually there is no limit to these Na- 
tional French loans. To be in France dur- 
ing the war and see the popular response to 
the appeal for funds is to have a thrilling 
experience in the practical side of patriot- 
ism. 

I chanced to be in Paris when one of 
these loans was launched. Throughout a 
day of driving rain thousands of people 
stood in line at the post offices and private 
institutions waiting for a chance to put their 
money out to work for their country. The 
French wage worker, be he artisan or street 
cleaner, needed no coaching in the art of 
employing his funds safely and profitably. 
Just as saving is instinct with him, so is the 
putting of these savings out to work in a 
Government bond second nature. He is the 
thriftiest and most cautious investor in the 
world. He has established a close and con- 
fidential relation with his banker such as 
exists in no other nation. Therefore when 
the French financier offers him Government 



The Price of Glory 189 

Bonds or "Loans of Victory" as the war is- 
sues are emotionally termed, he does not 
hesitate. He knows it is all right. 

Alluring as is the possibility of profit in 
the new French Rente at the present ab- 
normal exchange basis, it fades before the 
prospects for similar profit that lie in some 
of the Russian Government Bonds available 
in the United States. The Imperial Russian 
Internal Five and a Half Per Cent Loan of 
1 91 6 amounting to 2,000,000,000 roubles 
will illustrate. 

Ordinarily the Russian rouble is worth 
51.45 cents in American money. It has 
gone down to 32 cents. At this rate of 
exchange a thousand rouble bond bearing 
interest at 5^ per cent would only cost 
$320.00. Based on the normal value of the 
rouble this bond would be worth $514.60 or 
$194.60 above the present price of the bond 
— an increase of about 60.8 per cent on the 
investment. Figuring roubles at the normal 
rate of exchange the yearly yield would be 
$28.28 or 8.8 per cent on the investment. 

The fact that roubles are down so low is 
evidence that Russian credit at the moment 
is not as high as it might be. The principal 



190 The War After the War 

equity behind this bond, as well as most 
other Russian securities available in Amer- 
ica, is the fact that Russia has immense post- 
war possibilities. She will emerge from the 
conflict like a giant awakened and with the 
first realisation of her enormous undevel- 
oped resources. To offset this, however, is 
the lack of stability of Russian Government 
as compared with the other Allies which 
makes all Russian Bonds speculative. 

On account of the difficulty in shipping 
bonds and the preponderance of pro- Ally 
sentiment here, there has been a compara- 
tively small market for German and Aus- 
trian war issues in the United States. Yet, 
in the face of these handicaps, a consider- 
able market has developed. It is due to two 
definite reasons. One is the desire of the 
native born and transplanted Teuton to help 
his country. Many of them appear at the 
German banks with their savings books 
eager and ready to make financial sacrifice 
for the Fatherland. The other reason is 
that the German mark has so greatly depre- 
ciated (it has gone down from 23.82 cents 
to 17.65 cents) that should it ever come 
back to anything like normal and the Gov- 



The Price of Glory 191 

ernment does not repudiate its issues the 
investment will be very profitable. 

Here is the way it works out : in ordinary 
times a 4000 mark bond which would be the 
equivalent of a $1000 American piece, costs 
about $960. At the present low rate of ex- 
change the same German bond costs $690.00 
in American money and therefore shows a 
profit on the exchange basis alone of $270.00 
or over 28 per cent. Austrian Bonds show 
even a larger profit. 

Summarise our war lending and you get a 
total of all loans to belligerent Governments 
since the outbreak of the war that aggregate 
$1,828,600,000, which is nearly one- third of 
the whole cost of the Civil War. Add to 
this our loans of $185,000,000 to Canadian 
Provinces and Cities and $8,200,000 to the 
City of Dublin and to the City of London 
for water works improvements, a grand to- 
tal of $2,075,800,000 is rolled up. Of this 
sum $156,400,000 in obligations have ma- 
tured and been paid off, which leaves a net 
debt to us of $1,919,400,000. It divides up 
as follows: 

Great Britain . ., .$858,400,000 

France .1 656,200,000 



192 The War After the War 

Russia $167,200,000 

Italy 25,000,000 

Dominion of Canada . . 120,000,000 

Canadian Provinces and Mu- 
nicipalities / 185,000,000 

Germany ,. . ., 20,000,000 

Having taken this financial plunge into 
European financial waters, Uncle Sam has 
got the foreign lending habit and has loaned 
$117,000,000 to Latin- America, mainly to 
Argentina and Chili : $39,000,000 to neutral 
European nations, including Switzerland, 
Norway, Greece and Sweden. Not desiring 
to play any race favourites, he has speeded 
China on her way to enlightenment to the 
extent of $4,000,000. 

In buying foreign war bonds — a proce- 
dure which in war time naturally involves 
sentiment — it is wise for the investor to 
watch his step. Patriotism is all right in its 
place but unless you can afford to contribute 
money for purely emotional reasons, a cold 
business estimate of the situation is advis- 
able. This applies especially to the man or 
woman with savings who cannot afford to 
take chances. He or she will find it a good 



The Price of Glory 193 

rule to stick to external bonds except under 
exceptional conditions. 

One objection to the average internal bond 
is that with the exception of England the 
native money has greatly depreciated in in- 
ternational value. Of course, if all these 
countries finally get back to their old stand- 
ards of wealth, these investments will yield 
a very large profit. To reap this benefit, 
however, it will be necessary to hold the se- 
curities for a considerable period because it 
will take the warring countries a long time 
to "come back." Another fact in connection 
with internal bonds well worth remembering 
is that while belligerent countries will scru- 
pulously respect their obligations held by a 
great neutral like the United States whose 
good will and resources will be very neces- 
sary after the close of hostilities, there is the 
possibility, remote though it may be, that 
repudiation of home issues may come in the 
shock of readjustment. 

In a word, in purchasing a foreign war 
bond be sure to get a stable national name, 
accumulated wealth, habits of thrift, an am- 
ple taxing power, and a good conversion 
basis behind the security. 



194 The War After the War 

Amid all our war lending lurks a menace 
to future and necessary American financing. 
In flush times like these it is comparatively 
easy for us to spare large sums of money, 
because such capital is available and not 
missed at home. If there was the absolute 
certainty that all the foreign short term 
loans would be paid on maturity there would 
be no reason to show the red light. 

But any man who knows anything about 
the European financial situation also knows 
that it will be extremely difficult, almost im- 
possible, for the fighting nations to meet 
their obligations within the time specified. 
This does not mean that they will be unable 
to pay. It does mean, however, that the in- 
roads of the war will have been so terrific 
that pressing needs will so continue to pile 
up that renewals must be sought. Thus our 
money will still be tied up. 

What will happen at home? Simply this. 
American enterprise which will need capital 
for expansion may have to wait. In dis- 
cussing this matter one of the best known 
American bankers said this to me the other 
day: 

"If America had a benevolent despot I 



The Price of Glory 195 

believe that he ought to set aside an arbi- 
trary sum which would represent the limit 
that we as a nation could lend each year to 
foreign countries." 

There is still another hardship in this out- 
ward flow of our capital. It lies in the fact 
that the very attractive terms of the war 
loans have made it very difficult for Ameri- 
can railroads and corporations to finance 
their needs. They must pay more for their 
requirements than ever before. 

Yet this war financing has done more for 
us than merely provide an opportunity for 
the profitable employment of hundreds of 
millions of dollars. It has brought back 
home about $1,500,000,000 of our securities, 
mostly in railroad, that were held abroad. 
This has not only meant a considerable cut- 
ting down in the sum that we formerly had 
to send to Europe in interest and dividends, 
but it has helped to make us more econom- 
ically independent. There is still $1,780,- 
000,000 of our securities held abroad, and 
if the war keeps on much longer a great por- 
tion of it is likely to come back. 

There were two good reasons for this 
liquidation. One was that the holder of the 



196 The War After the War 

American security in England is subject to 
a very high tax in addition to the normal 
income tax on large fortunes. Another was 
the necessity for the mobilisation of Amer- 
ican securities to become part of the collat- 
eral offered by the British Government for 
the loans made in this country. In many 
instances the English owner of American 
securities has simply loaned them to his 
country as a patriotic act. In numerous 
other cases, however, he has sold them out- 
right and put the proceeds into home war 
issues. 

You have seen how our millions have 
joined that greater stream of European bil- 
lions to meet the rising tide of war cost. 
How is this vast debt to be paid and what 
is the paying capacity of the nations in- 
volved ? 

In analysing the war debt and its costly 
hangover for posterity, you must remember 
that not all of it is in actual money. The 
nations at war have not only taxed their 
economic reserve through the destruction 
of productive capacity in the loss of men 
and material — as I have already pointed out 
— but have made a costly and well-nigh per- 



The Price of Glory 197 

manent drain upon what might be called 
their nervous systems. 

Look for a moment at the American Civil 
War whose cost was a mere flea bite as com- 
pared with the stupendous price of the Eu- 
ropean Conflagration. At the end of that 
war only half of its reckoning was repre- 
sented in the country's bonded debt. After 
fifty years we are still paying in some way 
for the other and larger outlay, the invisible 
strain on the country. 

Strange as it may seem in the light of the 
present frightful ravage in Europe, no coun- 
try has ever been completely ravaged by 
war. When I returned from Europe more 
than a year ago, I was convinced that eco- 
nomic exhaustion would be the determining 
factor : that victory would perch on the side 
of the biggest bank roll. After a second 
trip to the warring lands I am convinced 
that I was wrong in my first impression. 
Observation again in England and France 
leads me to believe that man power — beef, 
not gold — will win. The extents to which 
financial credit can be extended in the coun- 
tries at war seem to be almost without limit. 

This leads to the final but all essential 



198 The War After the War 

detail: How will the European nations 
pay? 

Since the Allies practically have a mo- 
nopoly on the American money sent abroad 
for war purposes, let us briefly look at the 
equity behind the Thing known as National 
Honour. Its first and foremost bulwark is 
Wealth. Take England first. The wealth 
of the United Kingdom is $90,000,000,000: 
the annual income of the people $12,000,- 
000,000. To this you can add the wealth, 
resource and income of all her far-flung 
colonies and the immense amount of money 
due to her from foreign countries. Unlike 
France and save for a few Zeppelin raids, 
the Empire is absolutely free from the rav- 
age of war. The principal assault has been 
upon her income, for her great Principal is 
still intact. 

In examining the methods adopted by 
England and France to meet the cost of the 
war, you find a sharp difference of proced- 
ure which is characteristic of the countries. 
Following the British tradition, England is 
trying to make the war "pay its way" with 
taxation. Out of a total expenditure of $9,- 
500,000,000 for the current year, no less 



The Price of Glory 199 

than $2,500,000,000 was raised by taxation. 
The rest was obtained by loans at home 
and abroad. 

The income tax alone will serve to show 
the enormous increase in tribute. From .04 
per cent on small incomes to 13 per cent on 
large ones before the war it has risen to 1 
per cent on small incomes to over 41^ per 
cent on big ones. Again, 60 per cent of all 
excess profits earned since the war are sur- 
rendered to the State. 

I can give no better evidence of the re- 
sult of this taxation than to repeat what 
Reginald McKenna, Chancellor of the Brit- 
ish Exchequer, said to me in London last 
August : 

"The English position is so sound," he 
declared, "that if the war ended at the end 
of the current financial year, that is, on 
March the 31st, 191 7, our present scale of 
taxation would provide not only for the 
whole of our peace expenditures and the in- 
terest on the entire National Debt but also 
for a sinking fund calculated to redeem that 
debt in less than forty years. There would 
still remain a surplus sufficient to allow me 



200 The War After the War 

to wipe out the excess profit tax and to re- 
duce other taxes considerably." 

When I asked him to make this more spe- 
cific, he continued: 

"The total revenue for the current year 
is $2,545,000,000. Our last Peace Budget 
was $1,000,000,000. Assuming that the war 
would end by next March 1st, you must add 
another $590,000,000 for interest and sink- 
ing fund on the war debt together with a 
further $100,000,000 for pensions which 
would make the total yearly expenditure for 
the first year of peace $1,690,000,000. De- 
ducting this from the existing taxation you 
get a surplus of $855,000,000. Thus after 
withdrawing the $430,000,000 received from 
the excess profits tax there still remains a 
margin of $425,000,000." 

Indeed, to analyze British war finance to- 
day is to find something besides debits and 
credits and balances. It is a great moral 
force that does not reckon in terms of 
pounds or pence. There is no thought of 
indemnity to soothe the scars of waste: no 
dream of conquest to atone for friendly land 
despoiled. 

Money grubbing has gone, if only for the 



The Price of Glory 201 

moment, along with the other baser things 
that have evaporated in the giant melting 
pot of the war. In England to-day there 
are only two things, Work and Fight. They 
are giving the nation an economic rebirth: 
a new idea of the dignity of toil : they have 
begot a spirit of denial that is rearing an 
impregnable rampart of resource. 

Even more marvellous is the financial de- 
votion of the French who present a spectacle 
of unselfish sacrifice that merely to touch, 
as alien, is to have a thrilling and unfor- 
gettable experience. 

When you look into the French method of 
paying for the war you get the really pic- 
turesque and human interest details. In 
place of taxation you find that the war is 
being paid, in the main, out of the savings of 
the people. Instead of mortgaging the fu- 
ture, the Gaul is utilising his thrifty past. 

Never in all history is there a more im- 
pressive or inspiring demonstration of the 
value of thrift as a national asset. It has 
reared the bulwark that will enable France 
to withstand whatever economic attack the 
war will make. 

The difference between the English and 



202 The War After the War 

French system of war financing is psycho- 
logical as well as material. The average 
Frenchman has a great deal of the peasant 
in him. He is willing to give his life and 
his honour to the nation but he absolutely 
draws the line at paying taxes. This is why 
the French have made it a war of loans. 

Go up and down the battle line in France 
and you get startling evidence of the French 
devotion to savings. More than one English 
officer has told me of tearful requests from 
French peasants for permission to go back 
to their steel-swept and war-torn little farms 
to dig up the few hundreds of francs buried 
in some corner of field or garden. Equally 
impressive is the sight of farmers— usually 
old men and. women — working in the fields 
while shells shriek overhead and the artillery 
rumbles along dusty highways. 

Thus the French war debt will be met be- 
cause of the almost incredible saving power 
of the French people. It is at once their 
pride and their prosperity. When all is 
said and done, you discover that with na- 
tions as with individuals it is not what they 
make but what they save that makes them 
strong and enduring. 



The Price of Glory 203 

One afternoon last summer I talked in 
Paris with M. Alexandre Ribot, the French 
Minister of Finance: a stately white-bearded 
figure of a man who looked as if he had 
just stepped out of a Rembrandt etching. 
He sat in a richly tapestried room in the old 
Louvre Palace where more than one King 
had danced to merry tune. Now this stately 
apartment was the nerve centre of a mar- 
vellous and close-knit structure that repre- 
sented a real financial democracy. 

"How long can France stand the financial 
strain of war ?" I asked the Minister. 

Light flashed in his eyes as he replied : 

"So long as the French people know how 
to save, and this means indefinitely." 

Although the invader has crossed her 
threshold, France continues to save. Every 
wife in the Republic who is earning her live- 
lihood while her husband is at the front 
(and nearly every man who can carry a gun 
is fighting or in training), is putting some- 
thing by. It means the building up of a 
future financial reserve against which the 
nation can draw for war or peace. 

One rock of French economic solidity lies 
in her immense gold supply. The per capita 



204 The War After the War 

amount of gold is $30.02 and is larger than 
any other country in the world. The United 
States is next with $19.39, after which 
come the United Kingdom with $18.28, and 
Germany $14.08. Let me add, in this con- 
nection, that a good deal of the French gold 
is still in stocking and cupboard. 

By the end of 1916 the war had cost 
France $11,000,000,000, which means an 
annual fixed charge of $600,000,000, to 
which must be added $200,000,000 for pen- 
sions, making the total fixed burden of 
$800,000,000. 

All this cannot be paid out of savings, 
although in normal times France saves ex- 
actly $1,000,000,000 a year. But the Gov- 
ernment has one big trump card up its 
sleeve. It is the large fortunes of her citi- 
zens. They have been untouched by the 
war because practically no income tax has 
been levied. 

While the average Frenchman will sac- 
rifice his life rather than submit to taxation, 
the upper and wealthy class will do both. 
The annual income of the people of France 
is $6,000,000,000. Therefore a 12 per cent 
tax on this income would very nearly pro- 



The Price of Glory 205 

duce the entire fixed charge on the war debt. 
France looks into the financial future un- 
afraid. 

Financially, Russia ambles along like the 
Big Bear she typifies. In one respect her 
method of financing the war cost differs dis- 
tinctly from her Allies in the fact that she 
has received heavy advances from England 
and France. From England alone she bor- 
rowed $1,250,000,000 which was expended 
for arms and ammunition and field equip- 
ment. The Czar's Empire has put out five 
internal loans while the rest of the money 
needed has been raised out of the sale of 
short term Treasury Bills, paper money is- 
sues and tax levies. 

Except for the few millions of dollars 
obtained in the United States, Germany's 
financing — like her whole conduct of the 
war — is self-contained. Through five Im- 
perial 5 per cent loans ranging from one to 
three billion dollars each, she has established 
a war credit of $12,500,000,000. This money 
— to a smaller degree than in France — has 
come from the great mass of the German 
people. 

Other sources of revenue that are en- 



206 The War "After the War 

abling the Kaiser to pay for the war are 
Treasury Bills sold at home and a taxation 
that is moderate compared with the colossal 
pre-war taxation which spelled Germany's 
Preparedness. At the time I write this 
chapter her war expenditure had passed the 
$14,000,000,000 mark. Tack on to this Ger- 
many's peace debt of $5,000,000,000 more 
and you begin to see — with all the uncer- 
tainty of the war's duration — the immense 
burden that the Fatherland will have to 
carry. The war's drain on the German fu- 
ture is perhaps greater than that of any 
other country because all her war loans are 
long term. She has also loaned nearly $1,- 
000,000,000 to Austria, Turkey and Bul- 
garia. 

The Teutonic war cost has one distinct 
advantage over all others in that it is con- 
fined within the German borders. Hence 
Germany can do as she pleases with regard 
to its settlement. If the Mailed Fist obtains 
after the war she can clamp it down on her 
loans, wipe them out as she chooses and no 
one can offer a protest. 

Now let us dump all these statistics that 
represent so much blood, agony and sacrifice 



The Price of Glory 207 

into the middle of the table and strike a final 
balance sheet. 

On one hand you have the assets of 
the warring countries as represented by 
their national wealth. For the Allies, in- 
cluding Roumania, they show a total of 
$273,000,000,000: for the Central Powers 
they register $134,000,000,000. If wealth 
is the winning factor then the Allies have 
the advantage in weight of buying metal. 

Take the other side of the ledger and you 
see that up to November 1, 191 6, the four 
principal allied countries, England, France, 
Russia and Italy, had spent on direct war 
cost approximately $34,000,000,000, while 
the total Teutonic war expenditures have 
been $21,000,000,000. To this actual war 
cost must be added the peace debts of the 
belligerent nations which would supplement 
the allied expense account by $17,465,000,- 
000 and that of the enemy nations by $9,- 
808,000,000. 

Striking a grand total of liabilities, you 
find that if the war mercifully ends by Au- 
gust 1, 191 7 (as Kitchener predicted it 
might), the fighting peoples would face a 



208 The War After the War 

debt burden of all kinds that had reached 
$105,773,000,000. 

After this colossal scale of expenditures 
you may well ask: Will it ever be possible 
for European finance to see straight or 
count normally again? 

Be that as it may, no one can doubt that 
the battling nations, individually or with the 
marvellous team-work that kinship in their 
respective causes has begot, are able to pay 
their way while the struggle lasts. Grim 
To-day will take care of itself under the 
stress of passion born of desire to win. It 
is the Reckoning of that Uncertain To-mor- 
row that will prove to be the problem. 

You cannot bankrupt a nation any more 
than you can ruin an individual so long as 
brains and energy are available. Peace 
therefore will not find a ruined Europe but 
it will dawn on a group of depleted coun- 
tries facing enormous responsibilities. War 
ends but the cost of it endures. Just as 
present millions are paying with their lives 
so will unborn hosts pay with the sweat of 
their brows. 

Meanwhile our Financial Stake in the 



The Price of Glory 209. 

Great Struggle is secure. How much more 
we will have to put into Europe's Red Pay 
Envelope remains to be seen. In any event, 
we have learned how to do it. 



VII — The Man Lloyd George 

THE door opened and almost before 
I had crossed the threshold the 
little grey-haired man down at the 
end of the long stately room began 
to speak. Lloyd George was in action. 

I had last seen him a year ago in the 
murk of a London railway station when I 
bade him farewell after a memorable day. 
With him I had gone to Bristol where he 
had made an impassioned plea for harmony 
to the Trade Union Congress. Then he was 
Minister of Munitions, Shell-Master of the 
Nation in its critical hour of Ammunition 
Need. 

Now he had succeeded the lamented 
Kitchener as Minister of War; sat in the 
Seat of Strategy, head of the far-flung kha- 
kied hosts that even at this moment were 
breasting death on half a dozen fronts. 
Just as twelve months before he had un- 
flinchingly met the Great Emergency that 
threatened his country's existence, so did 
he again fill the National Breach. 

2IO 



The Man Lloyd George 211 

England's Man of Destiny whose long 
career is one continuous and spectacular 
public performance was on the job. 

But it was not the same Lloyd George 
who had sounded the call for Military and 
Industrial Conscription from the Peaks of 
Empire. Another year of war had etched 
the travail of its long agony upon his fea- 
tures, saddened the eyes that had always 
beheld the Vision of . the Greater Things. 
The little man was fresh from the front and 
full of all that its mighty sacrifice betok- 
ened not only to the embattled nations but 
to the world as well. 

Though we spoke of Politics, Presidents 
and the Great Social Forces that so far as 
England was concerned acknowledged him 
as leader, the current of speech always 
swept back to war and its significance for us. 

"Since the war means so much to us," I 
said, "have you no message for America?" 

Throughout our talk he had sat in a low 
chair sometimes tilting it backward as he 
swayed with the vehemency of his words. 
Suddenly he became still. He turned his 
head and looked dreamily out the window at 
his left where he could see the throng of 



212 The War After the War 

Whitehall as it swept back and forth along 
London's Great Military Way. 

Then rising slowly and with eloquent ges- 
ture and trembling voice (he might have 
been speaking to thousands instead of one 
person), he said: 

"The hope of the world is that America 
will realise the call that Destiny is making 
to her in tones that are getting louder and 
more insistent as the terrible months go by. 
That Destiny lies in the enforcement of 
respect for International Law and Interna- 
tional Rights." 

It was a pregnant and unforgettable mo- 
ment. From the Throne Room of a Mighty 
Conflict England's War Lord was sounding 
the note of a distant process of peace. 

If you had probed behind this kindling 
utterance you would have seen with Lloyd 
George himself that beyond the flaming 
battle-lines and past the tumult of a World 
at War was the hope of some far-away Tri- 
bunal that would judge nations and keep 
them, just as individuals are kept, in the 
path of Right and Humanity. 

But before any such bloodless antidote 
can be applied to International Dispute, to 



The Man Lloyd George 213 

quote Lloyd George again : "This war must 
be fought to a finish." 

These final words, snapped like a whip- 
lash and emphasised with a fist-beat on the 
table, meant that England would see her 
Titan Task through and if for no other rea- 
son because the man who drives the war 
gods wills it so. What sort of man is this 
who goes from post to post with inspired 
faith and unfailing execution? What are 
the qualities that have lifted him from ob- 
scure provincial solicitor to be the Prop of 
a People? 

"Let George do it," has become the 
chronic plea of all Britain in her time of 
trial. How does he do it? 

To understand any man you must get at 
his beginnings. Thus to appreciate Lloyd 
George you must first know that he is 
Welsh and this means that he was cradled 
in revolt. He must have come into the 
world crying protest. He was reared in a 
land of frowning crags and lovely dales, of 
mingled snow and sunshine, of poetry and 
passion. About him love of liberty clashed 
with vested tyranny. These conflicting 
things shaped his character, entered into 



214 The War After the War 

his very being and made him temperamen- 
tally a creature of magnificent ironies. 

But this conflict did not end with emo- 
tion. All his life Contrast, sometimes gro- 
tesque but always dramatic, has marked 
him for its own. You behold the Apostle 
of Peace who once espoused the Boer, trans- 
lated into the flaming Disciple and Maker 
of War through the Rape of Belgium. You 
see the fiery Radical, jeered and despised by 
the Aristocracy, become the Protector of 
Peers. No wonder he stands to-day as the 
most picturesque, compelling and challeng- 
ing figure of the English speaking race. 
Only one other man — Theodore Roosevelt 
— vies with him for this many-sided dis- 
tinction. 

The son of a village schoolmaster who 
died when he was scarcely three: the ward 
of a shoe-maker who was also inspired lay- 
preacher: the political protege of a Militant 
Nationalist whose heart bled at the oppres- 
sion of the Welsh, Lloyd George early 
looked out upon a life smarting with griev- 
ance and clamouring to be free. Knowing 
this, you can understand that the dominant 
characteristic of this man is to rebel against 



The Man Lloyd George 215 

established order. Swaddled in Democracy, 
he became its Embodiment and its Voice. 

The world knows about the Lloyd George 
childhood spent amidst poverty in a Welsh 
village. The big-eyed boy ate, thought and 
dreamed in Welsh, "the language that 
meant a daily fare of barley bread." When 
he learned English it was like acquiring a 
foreign tongue. He grew up amid a great 
revival of Welsh art, letters and religion 
that stirred his soul. He missed the pulpit 
by a narrow margin, yet he has never lost 
the evangelistic fervour which is one of the 
secrets of his control and command of peo- 
ple. 

With the alphabet Lloyd George absorbed 
the wrongs of his people and they were 
many. The Welsh had a double bondage: 
the grasp of the Landlord and the Thrall of 
the Church. All about him quivered the 
aspiration for a free land, a free people 
and a free religion. In those days Wales 
was like another Ireland with all the hard- 
ship that Eviction imposes. 

The call to leadership came early. As a 
boy in school he led his mates in rebellion 
against the drastic dictates of a Church 



216 The War After the War 

which prescribed liberty of religious 
thoughts and speech. He became the 
Apostle of Nonconformity and for it waged 
some of his fiercest battles. 

Always the gift of oratory was his. He 
preached temperance almost with his advent 
into his teens : he was a convincing speaker 
before most boys talked straight. 

In due time Lloyd George became a solici- 
tor but it was merely the step into public 
life. To plead is instinct with him and 
with advocacy of a case in court he was 
always urging some reform for his little 
country. Politics was meat and drink to 
him and he stood for Parliament. An 
ardent Home Ruler, he swayed his follow- 
ers with such intensity that what came to 
be known as Lloyd George's Battle Song 
sprang into being. Sung to the American 
tune of "Marching Through Georgia" it 
was hailed as the fighting hymn of Welsh 
Nationalism. Two lines show where the 
young Welsh lawyer stood in his early 
twenties: they also point his whole future: 

"The Grand Young Man will triumph, 
Lloyd George will win the day " 



The Man Lloyd George 217. 

There is something Lincoln-like in the 
spectacle of his first struggle. This lowly 
lad fought the forces of "Squirearchy and 
Hierarchy." The Tories hurled at him the 
anathema that he "had been born in a cot- 
tage." 

"Ah," replied Lloyd George, when he 
heard of it: "the Tories have not realised 
that the day of the cottage-bred man has 
dawned." 

Before he got through he was destined to 
show, that so far as opportunity was con- 
cerned, the Cottage in Great Britain was to 
be on a par with a Palace. 

As you analyse Lloyd George's life you 
find that he has always been a sort of Hu- 
man Lightning Rod that attracted the bolts 
of abuse. A campaign meant violent con- 
troversy, frequently physical conflict. The 
reason was that he always stated his cause 
so violently as to arouse bitter resentment. 

Into his first election he flung himself 
with the fury of youth and the eager pas- 
sion of a zealot. He threw conventional 
Liberalism to the wind and made a fight for 
a Free and United Wales. He frankly be- 
lieved himself to be the inspired leader of 



218 The War After the War 

his people: often his meetings became riots. 
More than once he was warned that the 
Tories would kill him and on several occa- 
sions he narrowly escaped death. Once 
while riding with his wife in an open car- 
riage through the streets of Bangor he was 
assailed by a hooting, jeering mob. Some 
one threw a blazing fire ball, dipped in par- 
affine, into the vehicle. It knocked off the 
candidate's hat and fell into Mrs. Lloyd 
George's lap setting her afire. Lloyd George 
threw off his coat, smothered the flames 
and after finding that the innocent victim 
of the assault was uninjured, calmly pro- 
ceeded to the Town Hall where he spoke, 
accompanied by a fusillade of stones which 
smashed every window in the structure. 

In this campaign, as in all succeeding 
ones, Lloyd George used the full powers of 
press publicity. He made reporters his con- 
fidants. Often he rehearsed his speeches 
before them, striding up and down and de- 
claiming as passionately as if he were facing 
huge audiences. In fact he acquired an in- 
terest in a group of Welsh papers. 

Already Welsh chieftainship was being 
crystallised in the aggressive little fire-eater. 



The Man Lloyd George 219 

Anticipating the coming call of the Mother 
Country she was laying her burdens on his 
stalwart shoulders. And what George was 
now doing for Wales he was soon to do in 
the larger arena of the Empire. 

Once in Parliament Lloyd George was no 
man's man. He became a free lance and 
while sometimes he ran amuck his cause was 
always the cause of his people. 

In those earlier Parliamentary days you 
find some of the traits that distinguished him 
later on. For one thing he disdained the 
drudgery of committee work: he chafed at 
the confinement of the conference room; 
eagle-like he yearned to spread his wings. 
His forte was talking. He loathed to mull 
over dull and unresponsive reports. He 
frankly admitted a disinclination to work, 
and it makes him one of the most superficial 
of men in what the world calls culture. His 
intelligence has more than once been char- 
acterised as "brilliant but hasty." 

But offsetting all this is the man's persua- 
sive and pleading personality which always 
gets him over the shallow ground of igno- 
rance. This is one reason why Lloyd George 
has always been stronger in attack than in 



220 The War After the War 

defence. His tactic has always been either 
to assault first or make a swift counterdrive. 
He is a sort of Stonewall Jackson of Debate. 

Then, as throughout his whole career, he 
showed an extraordinary aversion to letter- 
writing. He became known in Parliament 
as the "Great Unanswered." He used to 
say, and still does, that an unanswered let- 
ter answers itself in time. This led to the 
tradition that the only way to get a written 
reply out of Lloyd George was to enclose 
two addressed and stamped cards, one bear- 
ing the word "Yes" and the other "No." 
More than once, however, when friends and 
constituents tried this ruse they got both 
cards back in the same envelope ! 

Not long ago a well known Englishman 
wanted to make a written request of Lloyd 
George and on consulting one of his asso- 
ciates was given this instruction : "Make it 
brief. Lloyd George never reads a letter 
that fills more than half a page." 

There is no need of rehearsing here the 
long-drawn struggle through which he made 
his way to party leadership. In Parliament 
and out, he was a hornet — a good thing to 
let alone, and an ugly customer to stir up. 



The Man Lloyd George 221 

Whether he lined up with the Government or 
Opposition it mattered little. Lloyd George 
has always been an insurgent at heart. 

The crowded Nineties were now nearing 
their end, carrying England and Lloyd 
George on to fateful hour. Ministries rose 
and fell : Roseberry and Harcourt had their 
day : Chamberlain climbed to power : Asquith 
rose over the horizon. The long smouldering 
South African volcano burst into eruption. 
It meant a great deal to many people in Eng- 
land but to no man quite so much as to 
Lloyd George. 

Now comes the first of the many amazing 
freaks that Fate played with him. The In- 
stitution of War which in later years was to 
make him the very Rock of Empire was now, 
for a time at least, to be his undoing. 

Before the conflict with the Boers Lloyd 
George was a militant pacifist — a sort of 
peacemaker with a punch. When England 
invaded the Transvaal Lloyd George began 
a battle for peace that made him for the first 
time a force in Imperial affairs. He believed 
himself to be the Anointed Eoe of the War 
and he dedicated himself and all his powers 
to stem what seemed to be a hopeless tide. 



222 The War After the War 

It was a courageous thing to do for he not 
only risked his reputation but his career. 
Up and down the Empire he pleaded. He 
was in some respects the brilliant Bryan of 
the period but with the difference that he 
was crucifying himself and not his cause 
upon the Cross of Peace. He became the 
target of bitter attack: no epithet was too 
vile to hurl upon him. Often he carried his 
life in his hands as the episode of the Bir- 
mingham riot shows. In all his storm tossed 
life nothing approached this in daring or 
danger. 

Lloyd George was invited to speak in the 
Citadel of Imperialism which was likewise 
the home of Joseph Chamberlain, Arch- 
Apostle of the Boer War. Save for the 
staunchest Liberals the whole town rose in 
protest. For weeks the local press seethed 
and raged denouncing Lloyd George as 
"arch-traitor" and "self-confessed enemy.' , 
He was warned that he would imperil his life 
if he even showed himself. He sent back 
this word:, "I am announced to speak and 
speak I will." 

He reached Birmingham ahead of sched- 
ule time and got to the home of his host in 



The Man Lloyd George 223 

safety. All day long sandwich men paraded 
the highways bearing placards calling upon 
the citizenry to assemble at the Town Hall 
where Lloyd George was to speak "To de- 
fend the King, the Government and Mr. 
Chamberlain." 

Night came, the streets were howling 
mobs, every constable was on duty. The hall 
was stormed and when Lloyd George ap- 
peared on the platform he faced turmoil. 
Hundreds of men carried sticks, clubs and 
bricks covered with rags and fastened to 
barbed wire. When he rose to speak Bed- 
lam let loose. Jeers, catcalls and frightful 
epithets rained on him and with them rocks 
and vegetables. He removed his overcoat 
and stood calm and smiling. When he raised 
his voice, however, the grand assault was 
made. Only a double cordon of constables 
massed around the stage kept him from be- 
ing overwhelmed. In the free-for-all fight 
that followed one man was killed and many 
injured. 

Anything like a speech was hopeless : the 
main task was to save the speaker's life, for 
outside in the streets a bloodthirsty rabble 
waited for its prey. Lloyd George started 



224 The War After the War 

to face them single-handed and it was only 
when he was told that such procedure would 
not only foolishly endanger his life but the 
lives of his party which included several 
women, he consented to escape through a 
side door, wearing a policeman's helmet and 
coat. 

Fourteen years later Lloyd George re- 
turned to Birmingham acclaimed as a Sa- 
viour of Empire. Such have been the con- 
trasts in this career of careers. 

Fortunately England, like the rest of the 
world, forgets. The mists of unpopularity 
that hung about the little Welshman van- 
ished under the sheer brilliancy of the man. 
When the Conservative Government fell af- 
ter the Boer War he was not only a Cabinet 
possibility but a necessity. The Government 
had to have him. From that time on they 
needed him in their business. 

Lloyd George drew the dullest and dusti- 
est of all portfolios — the Board of Trade. 
He found the post lifeless and academic; he 
vivified and galvanised it and made it a vital 
branch of party life and dispute. It is the 
Lloyd George way. 

Here you find the first big evidence of one 



The Man Lloyd George 225 

of the great Lloyd George qualities that has 
stood him in such good stead these recent 
turbulent years. He became, like Henry 
Clay, the Great Conciliator. The whole 
widespread labour and industrial fabric of 
Great Britain was geared up to his desk. It 
shook with unrest and was studded with 
strife. Much of this clash subsided when 
Lloyd George came into office because he 
had the peculiar knack of bringing groups 
of contending interests together. Men 
learned then, as they found out later, that 
when they went into conference with Lloyd 
George they might as well leave their con- 
victions outside the door with their hats and 
umbrellas. 

To this policy of readjustment he also 
brought the laurel of constructive legislation. 
To him England owes the famous Patents 
Bill which gives English labour a share in 
the English manufacture of all foreign in- 
vention; the Merchant Shipping Bill which 
safeguards the interest of English sailor and 
shipper ; and the Port of London Bill which 
made the British metropolis immune from 
foreign ship menace. 

England was fast learning to lean on the 



226 The War After the War 

grey-eyed Welshman. He came to be known 
as the "Government Mascot": he was con- 
tinually pulling his party's chestnuts out of 
the fire of failure or folly. George had be- 
gun to "do it" and in a big way. 

Likewise the whole country was beginning 
to feel pride in his performance as the fol- 
lowing story, which has been adapted to 
various other celebrities, will attest : 

Lloyd George sat one day in the compart- 
ment of a train that was held up at the sta- 
tion at Cardiff. A porter carrying a travel- 
ler's luggage noticed him and called his cli- 
ent's attention, saying: 

"There is Lloyd George himself in that 
train." 

The traveller seemed indifferent and again 
the porter called attention to the budding 
great man. After persistent efforts to rouse 
his interest, the tourist, much nettled, said 
tartly : 

"Suppose it is. He's not God Almighty." 

"Ah," replied the porter, "remember he's 
young yet." 

When Lloyd George became Chancellor 
of the Exchequer under Asquith no one was 
surprised. It is typical of the man that he 



The Man Lloyd George 227 

should have leaped from the lowest to the 
highest place but one in the Cabinet. 

As Chancellor he had at last the oppor- 
tunity to fulfill his democratic destiny. 
Whatever Lloyd George may be, one thing 
is certain: he is essentially a man of the 
masses. With his famous People's Budget 
he legislated sympathy into the law. It 
meant the whole kindling social programme 
of Old Age pensions, Health and Unemploy- 
ment insurance, increased income tax and 
an enlarged death duty. As most people 
know, it put much of the burden of English 
taxation on the pocketbooks of the people 
who could best afford to pay. The Duke- 
baiting began. 

Just as he had fought for a Free Wales 
so did he now struggle for a Free Land. 
All his amazing picturesqueness of expres- 
sion came into play. He contended that Mo- 
nopoly had made land so valuable in Britain 
that it almost sold by the grain, like radium. 
In commenting on the heavy taxes levied by 
the land autocrats upon commercial enter- 
prise in London he made his famous phrase : 

"This is not business. It is blackmail !" 

To democracy the Budget meant economic 



228 The War After the War 

emancipation: the banishment of hunger 
from the hearth: the solace of an old age 
free from want. It made Lloyd George 
"The Little Brother of the Poor." To the 
Aristocracy it was the gauge of battle for 
the bitterest class war ever waged in Eng- 
land: violation of ancient privilege. 

The fight for this programme made Lloyd 
George the best known and most detested 
man in England. To hate him was one of 
the accomplishments of titled folk to whom 
his very name was a hissing and a by-word. 
Massed behind him were the common peo- 
ple whose champion he was : arrayed against 
him were the powers of wealth and rank. 

In this campaign Lloyd George used the 
three great weapons that he has always 
brought to bear. First and foremost was the 
force of his personality, for he swept Eng- 
land with a tidal wave of impassioned elo- 
quence. Second, he unloosed as never be- 
fore the reservoirs of ink, for he used every 
device of newspaper and pamphlet to drive 
home his message. He even printed his 
creed in Gaelic, Welsh and Erse. Third, he 
employed his kinship with the people to the 
fullest extent. The Commoner won. As 



The Man Lloyd George 229 

the great structure of social reform rose un- 
der his dynamic powers so did the influence 
of the House of Lords crumble like an Edi- 
fice of Cards. Democracy in England meant 
something at last! 

The tumult and the shouting died, the 
smoke cleared, and Lloyd George stood re- 
vealed as England's Strong Man, a sort of 
Atlas upholding the World of Public Life 
and much of its responsibilities. 

Now for the first time he was caught up 
in the fabric of the Crimson Net that a few 
years later was to haul nearly all Europe into 
war. In 191 1 Germany made a hostile dem- 
onstration in Morocco. Although England 
had no territorial interests there, it was im- 
portant for many reasons to warn the Kaiser 
that she would oppose his policy with armed 
force if necessary. A strong voice was need- 
ed to sound this note. Lloyd George did it. 

Hence it came about that the Chancellor 
of the Exchequer stood in the Mansion 
House on a certain momentous day and 
hurled the defi at the War Lord. It called 
the Teuton bluff for a while at least. In 
the light of later events this speech became 
historic. Not only did Lloyd George declare 



230 The War After the War 

that "national honour is no party question," 
but he affirmed that "the peace of the world 
is much more likely to be secured if all the 
nations realise fairly what the conditions of 
peace must be." 

Persistent pacifist propagandists to-day 
may well take warning from that utterance. 
He still believes it. 

The spark that flashed at Agadir now 
burst into flame. The Great War broke and 
half the world saw red. What Lloyd George 
believed impossible now became bitter and 
wrathful reality. Though he did not know 
it at the moment, the supreme opportunity 
of his life lay on the lap of the god of Bat- 
tles. 

The Lloyd George who sat in council in 
Downing Street was no dreaming pacifist. 
He who had tried to stop the irresistible 
flood of the Boer War now rode the full 
swell of the storm that threatened for the 
moment to engulf all Britain. 

As Chancellor of the Exchequer he was 
called upon to shape the fiscal policies that 
would be the determining factor in the War 
of Wars. "The last £100,000,000 will win," 
he said. Only one other man in England — 



The Man Lloyd George 231 

Lord Kitchener — approached him in im- 
mense responsibility of office in the con- 
fidence of the people. It was a proud but 
equally terrifying moment. 

Then indeed the little Welshman became 
England's Handy Man. As custodian of the 
British Pocketbook he had a full-sized job. 
But that was only part of the larger demand 
now made on his service. Popular faith re- 
garded him as the Nation's First Aid, infal- 
lible remedy for every crisis. 

If a compromise with Labor or Capital 
had to be effected it was Lloyd George who 
sat at the head of the table : if an Ally needed 
counsel or inspiration it was the Chancellor 
who sped across the water and laid down the 
law at Paris or Petrograd: if the Cause of 
Empire clamoured for expression from Gov- 
ernment Seat or animated rostrum, he stood 
forth as the Herald of Freedom. So it went 
all through those dark closing months of 
1914 as reverse after reverse shook the Brit- 
ish arms and brought home the realisation 
that the war would be long and costly. 

The year 191 5 dawned full of gloom for 
England but pointing a fresh star for the 
career of Lloyd George. Although the first 



232 The War After the War 

wave of Kitchener's new army had dashed 
against the German lines in France and es- 
tablished another tradition for British val- 
our, the air of England became charged with 
an ominous feeling that something was 
wrong at the front. The German advance 
in the west had been well nigh triumphant. 
Reckless bravery alone could not prevail 
against the avalanche of Teutonic steel. 

All the while the imperturbable Kitchener 
sat at his desk in the War Office — another 
man of Blood and Iron. He ran the war as 
he thought it should be run despite the criti- 
cism that began to beat about his head. To 
the average Englander he was a king who 
could do no wrong. But the conduct of war 
had changed mightily since Kitchener last 
led his troops. Like Business it had become 
a new Science, fought with new weapons 
and demanding an elastic intelligence that 
kept pace with the swift march of military 
events. The Germans were using every in- 
vention that marvellous efficiency and pre- 
paredness could devise. They met ancient 
England shrapnel with modern deadly and 
devastating high-explosives. If the war was 



The Man Lloyd George 233 

to be won this condition had to be changed 
— and at once. 

Two men in England — Lloyd George and 
Lord Northclifle — understood this situation. 
Fortunately they are both men of coura- 
geous mould and unwavering purpose. One 
day Northcliffe sent the military expert of 
the Times (which he owns) to France to in- 
vestigate conditions. He found that the 
greatest need of the English Army was for 
high-explosives. They were as necessary 
as bread. Into less than a quarter of a col- 
umn he compressed this news. Instead of 
submitting it to the Censor who would have 
denied it publication, Northcliffe published 
the despatch and with it the revelation of 
Kitchener's long and serious omission. He 
not only risked suspension and possible sup- 
pression of his newspapers, but also hazard- 
ed his life because a great wave of indigna- 
tion arose over what seemed to be an unwar- 
ranted attack upon an idol of the people. But 
it was the truth nevertheless. 

At a time when England was supposed to 
be sensation-proof this revelation fell like a 
forty-two centimetre shell. It was an amaz- 



234 The War After the War 

ing and dramatic demonstration of the pow- 
er of the press and it created a sensation. 

Shell shortage at the front had full mate 
in a varied deficiency at home. Ammunition 
contracts had been let to private firms at ex- 
cessive prices : labour was restricting output 
and breaking into periodic dissension : drink 
was deadening energy: in short, all the 
forces that should have worked together for 
the Imperial good were pulling apart. 

Northcliffe began a silent but aggressive 
crusade for reform in his newspapers, while 
Lloyd George let loose the powers of his 
tongue. A national crisis, literally precipi- 
tated by these two men, arose. The Liberal 
Government fell and out of its wreck 
emerged the Coalition Cabinet. This weld- 
ing of one-time enemies to meet grave 
emergency did more than wipe out party 
lines in an hour that threatened the Em- 
pire's very existence. 

The reorganised Cabinet knew — as all 
England knew — that the greatest require- 
ment was not only men but munitions. A 
galvanic personality was necessary to organ- 
ise and direct the force that could save the 
day. A new Cabinet post — the Ministry of 



The Man Lloyd George 235 

Munitions — was created. Who could fill it 
was the question. There was neither doubt 
nor uncertainty about the answer. It was 
embodied in one man. 

The little Welshman became Minister of 
Munitions. 

Lloyd George had led many a forlorn hope 
by taking up the task that weaker hands had 
laid down. Here, however, was a situation 
without precedent in a life that was a rebuke 
to convention. To succeed to an organised 
and going post these perilous war times was 
in itself a difficult job. In the case of the 
Ministry of Munitions there was nothing to 
succeed. Lloyd George had been given a 
blank order : it was up to him to fill it. He 
had to create a whole branch of Government 
from the ground up. All his powers of tact 
and persuasion were called into play. For 
one thing he had to fit the old established 
Ordnance Department rooted in tradition 
and jealous of its prerogatives into the new 
scheme of things. 

Lloyd George was no business man, but 
he knew how business affairs should be con- 
ducted. He knew, too, that America had 
reared the empire of business on close knit 



236 The War After the War 

and efficient organisation. He did what An- 
drew Carnegie or any other captain of cap- 
ital would do. He called together the 
Schwabs, the Edisons, the Garys and the 
Westinghouses of the Kingdom and made 
them his work fellows. 

From every corner of the Empire he 
drafted brains and experience. He wanted 
workers without stint, so he started a Bureau 
of Labor Supply : he needed publicity, so he 
set up an Advertising Department : to com- 
pete with the Germans he realised that he 
would need every inventive resource that 
England could command, so he founded an 
Invention and Research Bureau : he saw the 
disorganisation attending the output of 
shells in private establishments, so he plant- 
ed the Union Jack in nearly every mill and 
took over the control of British Industry: 
he found labour at its old trick of impeding 
progress, so with a Munitions Act he prac- 
tically conscripted the men of forge and mill 
into an industrial army that was almost un- 
der martial law. He cut red tape and in- 
jected red blood into the Department that 
meant national preservation. In brief, Lloyd 



The Man Lloyd George 237 

George was on the job and things were hap- 
pening. 

The Minister established himself in an old 
mansion in Whitehall Garden where belles 
and beaux had danced the stately minuet. It 
became a dynamo of energy whose wires ra- 
diated everywhere. "More Munitions" was 
the creed that flew from the masthead. 

A typical thing happened. The working 
force of the Ministry grew by leaps and 
bounds : already the hundreds of clerks were 
jam up against the confining walls of the old 
grey building. Lloyd George sent for one 
of his lieutenants and said: 

"We must have more room." 

"We have already reported that fact and 
the War Office says it will take three months 
to build new office space," was the reply. 

"Then put up tents," snapped the little 
man, "and we will work under canvas." 

Realising that his principal weapons were 
machines, Lloyd George took a census of all 
the machinery in the United Kingdom and 
got every pound of productive capacity down 
on paper. He was not long in finding out 
why the ammunition output was shy. Only 
a fifth of the lathes and tools used for Gov- 



238 The War After the War 

ernment work ran at night. "These ma- 
chines must work every hour of the twenty- 
four," he said. Before a fortnight had 
passed every munitions mill ground inces- 
santly. 

These machines needed adequate manning. 
Lloyd George thereupon created the plan 
that enlisted the new army of Munitions 
Volunteers. Nelson-like he issued the thrill- 
ing proclamation that England expected 
every machine to do its duty. It meant the 
end of restricted output. 

With the ban off restriction he likewise 
clamped the lid down on drink. Munitions 
workers could only go to the public houses 
within certain hours: the man who brought 
liquor into a Government controlled plant 
faced fines and if the offence was repeated, 
a still more drastic punishment. 

Lloyd George began a censorship of la- 
bour which disclosed the fact that many 
skilled workers were wasting time on un- 
skilled tasks. Lloyd George now began to 
dilute the skilled forces with unskilled who 
included thousands of women. 

Right here came the first battle. Labour 
rebelled. It could find a way to get liquor 



The Man Lloyd George 239 

but it resented dilution and cried out against 
capacity output. The Shell Master again be- 
came the Conciliator. He curbed the wild 
horses, agreeing to a restoration of pre-war 
shop conditions as soon as peace came. All 
he knew was the fact that the guns hungered 
and that it was up to him to feed them. 

The wheels were not whirring fast enough 
to suit Lloyd George. "We must build our 
own factories," he said. Almost over night 
rose the mills whose slogan was "English 
shells for English guns." In speeding up 
the English output the Welshman was also 
equipping England to meet coming needs, 
laying the first stone of the structure that is 
fast becoming an Empire Self -Contained. 

Lloyd George realised that he could not 
run every munitions plant, whereupon he or- 
ganised local Boards of Control in the great 
ordnance centres like Woolwich, Sheffield, 
Newcastle and Middleboro. Each became a 
separate industrial principality but all bound 
up by hooks of steel to the Little Wizard 
who sat enthroned at Whitehall. 

England became a vast arsenal, throbbing 
with ceaseless activity. The smoke that 
trailed from the myriad stacks was the ban- 



240 The War After the War 

ner of a new and triumphant faith in the 
future. 

What was the result? Up and down the 
western battle front English cannon spoke 
in terms of victory. No longer was British 
gunner required to husband shells: to meet 
crash with silence. He hurled back steel for 
steel and all because England's Hope had an- 
swered England's Call. Lloyd George had 
done it again. 

I first met Lloyd George during those 
crowded days when he was Commander-in- 
Chief of the host that fed the firing line. 
Under his magnetic direction British indus- 
try had been forged into a colossal munitions 
shop. No man in England was busier: not 
even the King was more inaccessible. Life 
with him was one engagement after another. 

Now came one of those swift emergencies 
that seems to crowd so fast upon Lloyd 
George's life and with it arose my own op- 
portunity. 

The British Trade Union Congress in an- 
nual session at Bristol had expressed La- 
bour's dissatisfaction over its share of the 
munitions profits. Lloyd George had sent 
them a letter explaining his proposed excess 



The Man Lloyd George 241 

profit tax, but this apparently was not 
enough. The delegates still growled. 

"Then I'll go down and speak to them in 
person," said the Minister with characteris- 
tic energy. 

Thus it happened that I journeyed with 
him to the old town, background of stirring 
naval history. On the way down half a 
dozen department heads poured into his re- 
sponsive ears the up-to-the-minute details of 
the work in hand. He became a Human 
Sponge soaking up the waters of fact. 

At Bristol in a crowded stuffy hall he 
faced what was at the start almost a menac- 
ing crowd. Yet as he addressed them you 
would have thought that he had known every 
man and woman in the assembly all their 
lives. The easy, intimate, frank manner of 
his delivery : his immediate claim to kinship 
with them on the ground of a common lowly 
birth: his quick and stirring appeal to their 
patriotism swept aside all discord and disaf- 
fection. As he gave an eloquent account of 
his stewardship you could see the audience 
plastic under his spell. The people who had 
assembled to heckle sat spellbound. When 
he had finished they not only gave him an 



242 The War After the War 

ovation but pledged themselves anew to the 
gospel of "More Munitions." 

It was on the train back to London that I 
got a glimpse of the real Lloyd George. 
What Roosevelt would have called "a bully 
day" had left its impress upon the little man. 
His long grey hair hung matted over a wilted 
collar : there was a wistful sort of weariness 
in his eyes. He sank into a big chair and 
looked for a long time in silence at the fly- 
ing landscape. Then suddenly he aroused 
himself and began to talk. Like many men 
of his type whom you go to interview he be- 
gan by interviewing the interviewer. 

The first two questions that Lloyd George 
asked me showed what was going on in his 
mind, for they were : 

"What were Lincoln's views of conscrip- 
tion, and did your soldiers vote during the 
Civil War?" 

There was definite method in these que- 
ries, for already the Shadow of Conscription 
had begun to fall over all England. It was 
Lloyd George, aided by Northcliffe, who led 
the fight for it. - 

The talk always went back to the great 



The Man Lloyd George 243 

war. When I spoke of his speech at Bristol 
his face kindled and he said: 

"Have you stopped to realise that this war 
is not so much a war of human mass against 
human mass as it is a war of machine against 
machine? It is a duel between the English 
and German workman." 

You cannot talk long with Lloyd George 
without touching on democracy. This is his 
chosen ground. I shall never forget the fer- 
vour with which he said: 

"The European struggle is a struggle for 
world liberty. It will mean in the end a 
victory for all democracy in its fight for 
equality." 

When I asked him to write an inscription 
for a friend of mine and express the hope 
that lay closest to his heart, he took a card 
from his pocket, gazed for a moment at the 
rushing country now shot through with the 
first evening lights, and then wrote: "Let 
Freedom- win." 

A few days later Lloyd George made still 
another appearance in his now familiar role 
of England's Deliverer. The South Wales 
coal miners, 2,000,000 in number, went on 
strike at a time when Coal meant Life to the 



244 The War After the War 

Empire. There is no need of asking the name 
of the man who went to calm this storm. 
Only one was eligible and he lost no time. 

Lloyd George did not call a conference at 
Cardiff: he went straight to Wales and 
spoke to the workers at the mouth of the 
pit. What arbitration and conciliation had 
failed to do, his hypnotic oratory achieved. 
The men went back to the mines with a cheer. 

A week later at the London Opera House 
he made a notable speech to the Conference 
of Representatives of the Miners of Great 
Britain. To have heard that speech was to 
get a liberal education in the art of phrase- 
ology and to carry always in memory the 
magic of the man's voice. In this speech he 
said: 

"In war and peace King Coal is the para- 
mount industry. Every pit is a trench : every 
workshop a rampart: every yard that can 
turn out munitions of war is a fortress. . . . 
Coal is the most terrible of enemies and the 
most potent of friends. . . . When you see 
the seas clear and the British flag flying with 
impunity from realm to realm and from 
shore to shore — when you find the German 



The Man Lloyd George 24*5 

flag banished from the face of the ocean, 
who had done it ? The British miner helping 
the British sailor." 

Small wonder that after this effort the 
miners of Wales should acclaim their gallant 
countryman as Industrial Messiah. 

You would think that by this time Eng- 
land had made her final tax on the resource 
of her Ready Man. But she had not. There 
came the desolate day when the news flashed 
over England that the "Hampshire" had 
gone down and with it Kitchener. Follow- 
ing the shock of this blow, greater than any 
that German arms could deliver, arose the 
faltering question, "Who is there to take his 
place?" 

It did not falter long. Once more the 
S.O.S. call of a Nation in Distress flashed 
out and again the spark found its man. 
Lloyd George went from Ministry of Muni- 
tions to sit in Kitchener's seat at the War 
Office. Unlike the Hero of Khartoum, he 
had no service in the field to his credit. But 
he knew men and he also knew how to deploy 
them. Just as he brought the Veterans of 
Business to sit around the Munitions Board, 



246 The War After the War 

so did he now marshal war-tried campaign- 
ers for the Strategy Table. The Somme 
blow was struck: the new War Chieftain 
proved his worth. 

In the midst of all these new exactions 
Lloyd George found time for other and 
arduous national labours. Two more epi- 
sodes will serve to close this narrative of un- 
precedented achievement. 

When the recent Irish Revolt had regis- 
tered its tragedy of blood, death and execu- 
tion, menacing the very structure of Empire, 
Lloyd George became the Emissary of Peace 
to the Isle of Unrest. 

Again, when prying peacemakers sought 
to intrude themselves upon the nations en- 
gaged in a life and death struggle, it was 
Lloyd George, in a remarkable interview, 
who warned all would-be winners of the No- 
bel prize that peace talk was unfriendly, that 
"there was neither clock nor calendar in the 
British Army," that the Allies would make 
it a finish fight. 

So it went until gloom once more took up 
its abode amid the Allies. Bucharest fell 
before the German assault: Greece seethed 
with the unhappy mess that Entente diplo- 



The Man Lloyd George 247 

macy had made of a great opportunity : land 
and sea registered daily some fresh evidence 
of Teutonic advance. What was wrong? 

England speculated, yet one man knew and 
that man was Lloyd George. He realised 
the futility of a many-headed direction of 
the war: with his swift insight he saw the 
tragic toll that all this cross purpose was 
taking. He made a demand on Asquith for 
a small War Council that would put dash, 
vigour and success into the British side of 
the conflict. The Premier refused to assent 
and Lloyd George resigned as War Chief. 
The Government toppled in a crisis that men- 
aced the very future of the nation. 

Great Britain stood aghast. Lloyd George 
stood for all the popular confidence in vic- 
tory that the nation felt. For a moment it 
appeared as if the very foundations of au- 
thority had crumbled. 

But not for long. When Bonar Law de- 
clined to reestablish the Government the oft- 
repeated cry for action that had invariably 
found its answer in the intrepid little Welsh- 
man, again rose up. Upon him devolved the 
task of constructing a new Cabinet which he 
headed as Prime Minister. He now reached 



248 The War After the War 

the inevitable goal toward which he had un- 
consciously marched ever since that faraway 
day when his voice was first heard in Parlia- 
ment. 

Even with Cabinet-making Lloyd George 
was a Revolutionist. He cut down the mem- 
bership from twenty-four to five, establish- 
ing a compact and effective War Council 
whose sole task is to "win the war." He 
centred more authority in the Premiership 
than the English system has ever known be- 
fore. He virtually became Dictator. 

On the other hand, he raised the number 
of Ministers outside the Cabinet from nine- 
teen to twenty-eight. He scattered the co- 
terie of lawyers who had so long comprised 
the Government Trust and put in men with 
red blood and proved achievement — in the 
main, self-made like himself. He installed 
a trained and competent business man of the 
type of Sir Albert Stanley, raised in the hard 
school of American transportation, as Presi- 
dent of the Board of Trade: he drafted a 
seasoned commercial veteran like Lord 
Rhondda (D. A. Thomas), for President of 
the Local Government Board: he raised his 
old and experienced aide, Dr. Christopher 



The Man Lloyd George 249 

Addison, to be Minister of Munitions: he 
made Lord Derby, who had conducted the 
great recruiting campaign, Minister of War : 
he put Sir Joseph Maclay, an extensive ship 
owner, into the post of Shipping Controller. 
Everywhere he supplanted politicians with 
doers. 

What was equally important he continued 
his role of Conciliator, for he placated La- 
bour by giving it a large representation and 
he took a definite step toward the solution 
of the Irish problem by making Sir Edward 
Carson First Lord of the Admiralty. 

Even as he stood at what seemed the very 
pinnacle of his power Destiny once more 
marked him for its own. He had scarcely 
announced his Cabinet when the world was 
electrified by the news of the German peace 
proposal. By his own action Lloyd George 
had placed himself at the head of the Council 
charged with the conduct of the war. To 
the Wizard Welshman therefore was put 
squarely the responsibility of continuing or 
ending the stupendous struggle. 

Never before in the history of any coun- 
try was such momentous responsibility con- 
centrated in an individual. The dramatic 



250 The War After the War 

element with which Lloyd George had be- 
come synonymous, found an amazing ex- 
pression. He was ill in bed when the Ger- 
man suggestion was made. No official an- 
nouncement of England's position in reply 
could be made until he had recovered. In 
the interim the whole world trembled with 
suspense while stock markets shivered. The 
Premier's name was on every tongue: the 
eyes of the universe were focussed on him. 
It was indeed his Great Hour. 

In what was the most significant speech of 
his career, and with all the force and fer- 
vour at his command, he stated the Empire's 
determination to fulfill its obligations to the 
trampled and ravaged countries. On that 
speech hung the stability of international 
financial credit, the lives of millions of men 
and the whole future security of Europe. 

You have seen the moving picture of a 
tumultuous life: what of the personality be- 
hind it? 

Reducing the Prime Minister to a for- 
mula you find that he is fifty per cent 
Roosevelt in the virility and forcefulness of 
his character, fifteen per cent Bryan in the 
purely demagogic phase of his makeup, while 



The Man Lloyd George 251 

the rest is canny Celt opportunism. It makes 
a dazzling and well-nigh irresistible com- 
posite. 

It is with Roosevelt that the best and hap- 
piest comparison can be made. Indeed I 
know of no more convincing interpretation 
of the Thing that is Lloyd George than to 
point this live parallel. For Lloyd George 
is the British Roosevelt — the Imperial Rough 
Rider. Instead of using the Big Stick, he 
employs the Big Voice. No two leaders ever 
had so much in common. 

Each is more of an institution than a mere 
man: each dramatises himself in everything 
he does: each has the same genius for the 
benevolent assimilation of idea and fact. 
They are both persistent but brilliant "cram- 
mers." • Trust Lloyd George to know all 
about the man who comes to see him whether 
he be statesman, author, explorer or plain 
captain of industry. It is one of the reasons 
why he maintains his amazing political hold. 

Lloyd George has Roosevelt's striking gift 
of phrase-making, although he does not 
share the American's love of letter writing. 
As I have already intimated, whatever may 
be his future, Lloyd George will never be 



252 The War After the War 

confronted by accusing epistle. None exists. 

Like Roosevelt, Lloyd George is past mas- 
ter in the art of effective publicity. He has 
a monopoly on the British front page. Each 
of these remarkable men projects the fire and 
magnetism of his dynamic personality. Curi- 
ously enough, each one has been the terror 
of the Corporate Evil-doer — the conspicuous 
target of Big Business in his respective coun- 
try. Each one is a dictator in the making, 
and it is safe to assume that if Lloyd George 
lived in a republic, like Roosevelt he would 
say: "My Army," "My Navy" and "My 
Policies." 

Roosevelt, however, has one distinct ad- 
vantage over his British colleague in that he 
is a deeper student and has a wider learning. 

In one God-given gift Lloyd George not 
only surpasses Roosevelt but every other man 
I have ever met. It is an inspired oratory 
that is at once the wonder and the admira- 
tion of all who hear it. He is in many re- 
spects the greatest speaker of his day — the 
one man of his race whose utterance imme- 
diately becomes world property. The stage 
lost a great star when the Welsh David went 
into politics. There are those who say that 



The Man Lloyd George 253 

he acts all the time, but that is a matter of 
opinion dictated by partisan or self-interest. 

Lloyd George is what we in America, and 
especially those of us born in the South, call 
the "silver-tongued." His whole style of 
delivery is emotional and greatly resembles 
the technique of the Breckenridge-Watter- 
son School. In his voice is the soft me- 
lodious lilt of the Welsh that greatly adds to 
the attractiveness of his speech. 

Before the public he is always even-tem- 
pered and amiable, serene and smiling, quick 
to capitalize interruption and drive home 
the chance remark. He invariably estab- 
lishes friendly relations with his hearers, 
and he has the extraordinary ability to make 
every man and woman in the audience be- 
fore him believe that he is getting a direct 
and personal message. 

Lloyd George can be the unfettered poet 
or the lion unleashed. Shut your eyes as you 
listen and you can almost hear the music of 
mountain streams or the roar of rushing 
cataracts. In his great moments his elo- 
quence is little short of enthralling, for it 
is filled with an inspired imagery. No living 
man surpasses him in splendour of oratorical 



254 The War After the War 

expression. His speeches form a literature 
all their own. 

When, for example, yielding to that per- 
sistent Call of Empire for his service he 
interpreted England's cause in the war at 
Queen's Hall in London, in September, 1914, 
in what was in many respects his noblest 
speech, he said in referring to Belgium and 
Servia : 

"God has chosen little nations as the ves- 
sels by which He carries His choicest wines 
to the lips of humanity, to rejoice their 
hearts, to exalt their vision, to stimulate and 
strengthen their faith; and if we had stood 
by when two little nations were being 
crushed and broken by the brutal hands of 
barbarism, our shame would have rung down 
the everlasting ages." 

In closing this speech which he gave 
the characteristic Lloyd George title of 
"Through Terror to Triumph," he uttered a 
peroration full of meaning and significance 
to United States in its present hour of pride 
and prosperity. He said: 

"We have been living in a sheltered valley 
for generations. We have been too com- 



The Man Lloyd George 255 

fortable and too indulgent, many, perhaps, 
too selfish, and the stern hand of fate has 
scourged us to an elevation where we can 
see the everlasting things that matter for a 
nation — the great peaks we had forgotten, 
of Honour, Duty, Patriotism, and, clad in 
glittering white, the towering pinacle of 
Sacrifice pointing like a rugged finger to 
Heaven. 

"We shall descend into the valleys again; 
but as long as the men and women of this 
generation last, they will carry in their 
hearts the image of those mighty peaks 
whose foundations are not shaken, though 
Europe rock and sway in the convulsions of 
a great war." 

Now take a closing look at the man him- 
self. You see a stocky, well-knit figure, broad 
of shoulder and deep of chest. The animated 
body is surmounted by a face that alter- 
nately beams and gleams. There are 
strength and sensitiveness, good humour, 
courage and resolution in these features. 
His eyes are large and luminous, aglow at 
times with the poetry of the Celt: aflame 



256 The War After the War 

again with the fervour of mighty purpose. 
He moves swiftly. To have him pass you by 
is to get a breath of life. 

To all this strength and power he brings 
undeniable charm. In action he is like a man 
exalted: in repose he becomes tender, 
dreamy, almost childlike. His whole nature 
seems to be driven by a vast and volcanic 
energy. This is why, like Roosevelt, he has 
been able to crowd the achievements of half 
a dozen careers into one. He is indeed the 
Happy Warrior. 

Yet Lloyd George knows how to play. I 
have known him to work incessantly all day 
and follow the Ministerial game far into the 
night. Ten o'clock the next morning would 
find him on the golf links at Walton Heath 
fresh and full of vim and energy. At fifty- 
three he is at the very zenith of his strength. 

Why has he succeeded? Simply because 
he was born to leadership. Without being 
profound he is profoundly moving: without 
studying life he is an unerring judge of men 
and moods. Volatile, masterful and above 
all human he is at once the most consistent 
and inconsistent of men. 

But it is a new Lloyd George who stepped 



The Man Lloyd George 257 

from unofficial to official stewardship of 
England: a Lloyd George with the fire- 
brand out of his being, purged of bitter re- 
volt, chastened and mellowed by the years of 
war ordeal. Out of contact with mighty 
sacrifice has come a kinship with the spirit. 
He is to-day like a man transformed. "Eng- 
land hath need of him." 

There are those who see in the new 
Lloyd George a Conservative in evolution. 
But whatever the political product of this 
change may be, it represents the equipment 
necessary to meet the shock of peace. For 
peace will demand a leadership no less vig- 
orous than war. 

The lowly lad who dreamed of power amid 
the Welsh Hills is to-day the Hope of 
Empire. 



VIII — From Pedlar to Premier 



f~ "^HE great General who once said 
that war is the graveyard of repu- 
M tations might have added that in 
its fiery furnace great careers are 
welded. Out of the Franco-Prussian con- 
flict emerged the Master Figure of Bis- 
marck : the Soudan brought forth Kitchener 
and South Africa Lord Roberts. The Great 
Struggle now rending Europe has given 
Joffre to French history and up to the time 
of this writing it has presented to the British 
Empire no more striking nor unexpected 
character than William Morris Hughes, the 
battling Prime Minister of Australia — the 
Unknown who waked up England. 

Even to America where the dramatisa- 
tion of the Self-made Idea has become a 
commonplace thing the story of his rise from 
pedlar to premier has a meaning all its own. 
Elsewhere in this book you have seen how he 
stirred Great Britain to the post-war com- 
mercial menace of the German. It is pe- 
culiarly fitting therefore that this narrative, 
258 



From Pedlar to Premier 259 

dedicated as it is to the War after the War, 
should close with some attempt at interpreta- 
tion of the personality of the man who 
sounded its first trumpet call. 

Like Lloyd George, Hughes is a Welsh- 
man. These two remarkable men, who have 
done so much to rouse their people, have 
more than racial kinship in common. They 
are both undersized: both rose from the 
humble hearth : both made their way to emi- 
nence by way of the bar : both gripped popu- 
lar imagination as real leaders of democracy. 
They are to-day the two principal imperial 
human assets. 

Hughes will tell you that he was born frail 
and has remained so ever since. This son 
of a carpenter was a weak, thin, delicate boy, 
but always a fighter. At school in London he 
was the only Nonconformist around, and the 
biggest fellows invariably picked upon him. 
He could strike back with his fists and pro- 
tect his narrow chest, but his legs were so 
thin that he had to stuff exercise books in his 
stockings to safeguard his shins. 

Hughes was trained for teaching, and only 
the restlessness of the Celt saved him from 
a life term in the schoolroom. At sixteen he 



260 The War After the War 

had become a pupil instructor. But the sea 
always stirred his imagination. He would 
wander down to the East India Docks and 
watch the ships load with cargoes for spicy 
climes. One day as he watched the great 
freighters a boy joined him. He looked very 
sad, and when Hughes asked him the reason 
he said he wanted to go home to visit his 
people, but lacked the money. 

"I'll lend you some," said Hughes impul- 
sively. 

He went home and out of the lining of an 
ancient concertina he produced thirty shill- 
ings, all the money he had in the world. He 
handed this hoard over to his new-found 
friend and promptly forgot all about it. He 
kept on teaching. 

I cite this little episode because it was the 
turning point in a great man's career. The 
boy who borrowed the shillings went to Aus- 
tralia. Several years later he returned the 
money and with it this message: "This is 
a great country full of opportunity for a 
young man. Chuck your teaching and come 
out here." Hughes went. 

Three months later — it was in 1884 — and 
with half a crown in his pocket he walked 



From Pedlar to Premier 261 

ashore at Brisbane. He looked so frail that 
the husky dock labourers jeered at his phys- 
ical weakness. Yet less than ten years from 
that date he was their militant leader march- 
ing on to the Rulership of all Australia. 

In those days Australia was a rough land. 
Beef, bullying and brawn were the things 
that counted most in that paradise of ticket- 
of -leave men. Hughes bucked the sternest 
game in the world and with it began a series 
of adventures that read like a romance and 
give a stirring background to the man's ex- 
traordinary public achievements. 

Hughes found out at once that all hope of 
earning a livelihood by teaching in the bush 
was out of the question. His money was 
gone : he had to exist, so he took the first job 
that came his way. A band of timber-cut- 
ters about to go for a month's sojourn in the 
woods needed a cook, so Hughes became 
their potslinger. Frail as he was, he seemed 
to thrive on hardship. In succession he be- 
came sheep shearer, railway labourer, bound- 
ary rider, stock runner, scrub-cleaner, coastal 
sailor, dishwasher in a bush hotel, itinerant 
umbrella-mender and sheep drover. 

With a small band he once brought fifty 



262 The War After the War 

thousand sheep down from Queensland into 
New South Wales. For fifteen weeks he was 
on the tramp, sleeping at night under the 
stars, trudging the dusty roads all day. At 
the end of this trip occurred the incident that 
made him deaf. Over night he passed from 
the sun-baked plains to a high mountain alti- 
tude. Wet with perspiration, he slept out 
with his flocks and caught cold. The result 
was an infirmity which is only one of many 
physical handicaps that this amazing little 
man has had to overcome throughout his 
tempestuous life. 

Yet he has fought them all down. As he 
once humorously said : "If I had had a con- 
stitution I should have been dead long ago." 

After all his strenuous bushwhacking the 
year 1890 found him running a small shop in 
the suburbs of Sydney. By day he sold 
books and newspapers : at night he repaired 
locks and clocks in order to get enough 
money to buy law books. Into his shop 
drifted sailors from the wharves with their 
grievances. Born with a passionate love of 
freedom, these sounds of revolt were as mu- 
sic to his ears. Figuratively he sat at the 
feet of Henry George, whose "Progress and 



From Pedlar to Premier 263 

Poverty" helped to shape the course of his 
thinking. Lincoln's letters and speeches 
were among his favourites, too. 

One night a big dock bruiser grabbed a 
package of tobacco off the counter, but be- 
fore he could move a step Hughes had 
caught him under the jaw with his fist. His 
burly associates cheered the game little shop- 
keeper. They now came to him with their 
troubles and he was soon their friend, 
philosopher and guide. 

For years the synonym for Australian 
Labour was strike. When the unions were 
merged into a national body Hughes was the 
unanimous choice of the husky stevedores 
for leader. He became the Great Restrainer. 
Never was influence of lip and brain over 
muscle and temper better demonstrated. The 
wild men of the wharves — the roughest 
crowd in all labour — were under his spell. 
This nimble-footed shopkeeper flouted them 
with his wit : ruled with his mind. 

On a certain occasion five hundred of 
them were crowded into a building at Sydney 
yelling bloody murder and clamouring for 
violence. Suddenly the tiny figure of Hughes 
appeared on the platform before them. At 



264 The War 'After the War 

first they yelled him down, but he stood 
smiling, resolute, undaunted. He began to 
talk: the tumult subsided: he stepped for- 
ward, stamped his foot and said in a voice 
that reached to every corner: 

"You shall not strike." And they did not. 
David had defied the Goliaths. 

From that time on Hughes was the Brains 
of Australian Labour. He organised his in- 
dustrial rough riders into a powerful and 
constructive union. With it he drove a 
wedge into the New South Wales Legisla- 
ture and gave industry, for the first time, a 
seat in its Councils. He became its Parlia- 
mentary Voice. He was only thirty. 

Having got his foot in the doorway of 
public life, he now jammed the portal wide 
open. As trade union official he forged 
ahead. He became the Father Confessor 
of the Worker. His advice always was: 
"Avoid violence : put your faith in the ballot 
box." With this creed he tamed the Labour 
Jungle : through it he built up an industrial 
legislative group that acknowledged him as 
chief. 

Though he was rising to fame the strug- 
gle for existence was hard. No matter how 



From Pedlar to Premier 265 

late he toiled in legislative hall or union as- 
sembly, he read law when he got home. He 
was admitted to the bar, and despite his deaf- 
ness he became an able advocate. When he 
had to appear in court he used a special ap- 
paratus with wire attachments that ran to 
the witness box and the bench and enabled 
him to hear everything that was going on. 

He became a journalist and contributed a 
weekly article to the Sydney Telegraph. An 
amusing thing happened. He noticed that 
remarkable statements began to creep into 
his articles when published. When he com- 
plained to the editor he discovered that the 
linotype operator who set up his almost in- 
decipherable copy injected his own ideas 
when he could not make out the stuff. 

The limitation of a State Legislature irked 
Hughes. He beheld the vision of an Aus- 
tralian Commonwealth that would federate 
all those Overseas States. When the far- 
away dominions had been welded under his 
eloquent appeal into a close-knit Union, the 
fragile, deaf little man emerged as Attorney 
General. At last he had elbow room. 

It was due to his efforts that Australia got 
National Service, an Officers' School, ammu- 



266 The War After the War 

nition factories, military training for school- 
boys. They were all part of the kindling 
campaign that he waged to the stirring 
slogan of "Defence, not Defiance. ,, 

Always the friend and champion of La- 
bour, he was in the thick of incessant contro- 
versy. His enemies feared him : his friends 
adored him. He got a variety of names that 
ranged all the way from "Bush Robes- 
pierre" to the "Australian Abraham Lin- 
coln." 

The Great War found Hughes the Strong 
Man of Australia, soon to be bound up in 
the larger Destiny of the Empire. 

Even before the Mother Country sent her 
call for help to the Children beyond the seas, 
Hughes had offered the gallant contingent 
that made history at the Dardanelles. 
Thanks to him, they were prepared. It was 
Hughes who sped the Anzacs on to Gallipoli : 
it was Hughes who, on his own responsibil- 
ity, offered fifty thousand men more. These 
men were not in sight at the moment, but the 
intrepid statesman went forth that very day 
and started the crusade that rallied them at 
once. 

Hughes was moving fast, but faster 



From Pedlar to Premier 267 

moved the relentless course of the war. Gal- 
lipoli's splendid failure had been recorded, 
the Australians stood shoulder to shoulder 
with their British brothers in the French 
trenches when the opportunity which was to 
make him a world citizen knocked at his 
door. 

In October, 191 5, Andrew Fisher resigned 
the Premiership of Australia to become High 
Commissioner in London, and Hughes was 
named as his successor. The puny lad who 
had landed at Brisbane thirty years before 
with half a crown in his pocket sat en- 
throned. The reins of power were his and 
he lost no time in lashing them. 

How he divorced the German from Aus- 
tralian trade: how he broke the Teutonic 
monopoly of the Antipodean metal fields and 
established the Australian Metal Exchange 
and made of it an Imperial institution for 
Imperial revenue only: how he swept Eng- 
land with a torrent of fervid oratory rous- 
ing the whole nation to its post-war commer- 
cial responsibilities, are all part of very re- 
cent history already woven into the fabric 
of this little volume. 

"Reconstruct or decay" was his admoni- 



268 The War After the War 

tion. Reluctantly the great mass of Eng- 
lish people saw him leave their shores last 
summer. Already the demand for his re- 
call as unofficial Speeder-up of Patriotism 
is simmering. 

What of the man behind this drama of 
almost unparalleled performance? 

To see Hughes in action is to get the im- 
pression of a human dynamo suddenly let 
loose. His face is keen and sharp : his mouth 
thin : his cheeks are shrunken : his arms and 
legs are long and he has a curious way of 
stuffing his clenched fists into his trousers 
pockets. Some one has called him the Mira- 
beau of the Australian Proletariat. Cer- 
tainly he looks it. He has a nervous energy 
almost beyond belief. By birth, tempera- 
ment, experience and point of view he is a 
firebrand, but with this difference: he is 
a Human Flame that reasons. 

Only Lloyd George surpasses him in force 
and fervour of eloquence. He has a mar- 
vellous trick of expression that never fails 
to make a winning appeal. His speeches are 
the Bible of the Australian worker, and they 
are fast becoming part of the Gospel of the 



From Pedlar to Premier 269 

wide-awake and progressive British wage- 
earner. 

Since he was the first Statesman of the 
Empire to appreciate the grave business re- 
sponsibilities that will come with peace, it 
is interesting to get his ideas on the relation 
between Trade and Government. In one of 
his impassioned speeches in England he de- 
clared : 

"The relations between modern trade in- 
terests and national welfare are so intimate 
and complex that they cannot be treated as 
though they were not parts of one organic 
whole. No sane person now suggests that 
the foreign policy of the country should be 
dealt with by the laissez-faire policy. No 
one would dare openly to contend that the 
national policy should be one of 'drift,' al- 
though I admit that there are many most ex- 
cellent persons who by their attitude seem 
to resent any attempt to steer the ship of 
State along a definite course as being an im- 
pious attempt to usurp the functions of 
Providence, whose special business they con- 
ceive this to be. 

"I want to make one thing quite clear, that 
what I am advocating is not merely a change 



270 The War After the War 

of fiscal policy, not merely or even neces- 
sarily what is called Tariff Reform — al- 
though this may, probably will, incidentally 
follow — but a fundamental change in our 
ideas of government as applied to economic 
and national matters. The fact is that the 
whole concept of modern statesmanship 
needs revision. But England has been, and 
is, the chief of sinners. Quite apart from 
the idea of a self-contained Empire there is 
the idea of Britain as an organized nation. 
And the British Empire as an organized Em- 
pire, organised for trade, for industry, for 
economic justice, for national defence, for 
the preservation of the world's peace, for 
the protection of the weak against the strong. 
That is a noble ideal. It ought to be — it 
must be — ours." 

An extract from another notable address 
will reveal his gift of words. Commenting 
on the frightful price in human life and 
treasure that the Empire was paying, he 
said: 

"Let us take this solemn lesson to heart. 
Let us, resolutely putting aside all consid- 
erations of party, class, and doctrine, with- 
out delay, proceed to devise a policy for the 



From Pedlar to Premier 271 

British Empire, a policy which shall cover 
every phase of our national, economic, and 
social life; which shall develop our tre- 
mendous resources, and yet be compatible 
with those ideals of liberty and justice for 
which our ancestors fought and died, and 
for which the men of our race now, in this, 
the greatest of all wars, are fighting and 
dying in a fashion worthy of their breeding. 

"Let us set sail upon a definite course as 
becomes a mighty nation to whom has been 
entrusted the destiny of one-fourth of the 
whole human race." 

Hughes is the most accessible of men. The 
humblest wharf-rustler in Australia hails 
him by his first name. A characteristic inci- 
dent will show the comradeship that exists 
between this leader and his constituency. 

On his last visit to England he crossed 
over to France to visit the Australian troops 
at the front. He was walking through a 
trench accompanied by General Birdwood, 
who is Commander-in-Chief of the overseas 
contingent, and stopped to chat with a group 
of soldiers who had fought at Gallipoli. Sud- 
denly a shell shrieked overhead. A Tommy 
from Sydney yelled to the Premier : 



272 The War "After the War 

"Duck, Billy, duck!" 

Here is practical democracy. Nowhere, 
in all the varied human side of the war, does 
it find more impressive embodiment than in 
the self-made little Australian whose life is 
a miracle of progress. 

Of such stuff as this are the Builders of 
the British To-morrow! 



THE END 



